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The American Prospect - articles by authorenThe Economy Won’t Save Republicans in the Midtermshttp://prospect.org/article/economy-wont-save-republicans-midterms
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<p>Republican Senators John Barrasso, Roy Blunt, Mitch McConnell, John Thune, and John Cornyn on July 31, 2018</p>
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<p><span class="dropcap">D</span>onald Trump keeps bragging about <a data-rapid-parsed="slk" data-rapid_p="1" data-v9y="1" data-ylk="subsec:paragraph;cpos:1;elm:context_link;itc:0" href="https://www.nytimes.com/2018/08/10/business/economy/trump-economy-credit.html">the economy</a>—an unemployment rate of just 3.9 percent, 3.7 million jobs created since he took office, consumer confidence up. Will this help the Republicans in the 2018 midterms? Probably not.</p>
<p>If anything, the good economic performance paradoxically will hurt the GOP. Why? Because it’s not trickling down to ordinary people. Voters hear news reports and claims about the strong economy but know that <a data-rapid-parsed="slk" data-rapid_p="3" data-v9y="1" data-ylk="subsec:paragraph;cpos:2;elm:context_link;itc:0" href="https://www.cbsnews.com/news/why-your-wages-arent-growing/">their own wages are still lousy</a>. This reinforces their sense that someone else is making off with the gains. And the statistics bear them out. Because of structural changes in the job market, <a data-rapid-parsed="slk" data-rapid_p="4" data-v9y="1" data-ylk="subsec:paragraph;cpos:2;elm:context_link;itc:0" href="http://www.epi.org/blog/why-is-wage-growth-so-slow-its-not-because-low-wage-jobs-are-being-added-disproportionately/">real wages</a> adjusted for inflation are actually flat.</p>
<p>What structural changes? A shift in power from the worker to the boss. A shift to part-time, temp, and contract work. An escalation in the war against unions.</p>
<p>This the first time in modern economic history that very low unemployment rates and tight labor markets have not led to higher worker earnings. Regular people may not grasp the finer nuances of labor market theory, but they know when the boss is giving them a good screwing.</p>
<p>Same story with the tax cut. Republicans thought it would give them bragging rights with voters. But so little of it actually trickles down that Republican candidates have <a data-rapid-parsed="slk" data-rapid_p="9" data-v9y="0" data-ylk="subsec:paragraph;cpos:5;elm:context_link;itc:0" href="https://www.huffingtonpost.com/entry/opinion-kuttner-republicans-tax-cut_us_5add0678e4b089e33c8945fc">stopped bragging about it</a>. Rather, <span class="pullquote-right">Democrats hit pay dirt when they emphasize that the immense deficit created by the ten-year cuts have become the excuse for Republicans to target cuts in Social Security and Medicare.</span></p>
<p>If anything, the picture is likely to worsen in the coming months—in three respects. First, the huge tax cuts have created an old-fashioned deficit-driven stimulus. That’s not a great idea when the economy is already at full employment because it creates concern about inflation. This is exaggerated in this low-wage economy, but it gives the Federal Reserve a reason to hike interest rates.</p>
<p>The Fed has held off on rate hikes for the moment but is <a data-rapid-parsed="slk" data-rapid_p="10" data-v9y="0" data-ylk="subsec:paragraph;cpos:7;elm:context_link;itc:0" href="http://www.marketwatch.com/story/fed-to-send-clear-message-that-more-rate-hikes-are-coming-2018-07-27">likely to increase interest rates</a> in coming months, most likely in September, two months before the midterm elections. These higher rates will cycle through to everything from credit cards to home mortgages. Consumers will not experience higher wages, but they will experience higher costs.</p>
<p>Secondly, corporations have put their savings from Republican tax cuts into <a data-rapid-parsed="slk" data-rapid_p="11" data-v9y="0" data-ylk="subsec:paragraph;cpos:8;elm:context_link;itc:0" href="https://www.huffingtonpost.com/entry/tax-law-stock-buybacks_us_5a9990ade4b089ec3539d869">stock buybacks</a>. This pumps up share value, enriching executives and investors, but risks creating another financial bubble. And that is very likely to pop on Trump’s watch.</p>
<p>And lastly, Trump’s trade war has not done serious damage to the economy as a whole―yet. But damage in key sectors that supported Trump is coming soon, from manufacturing to soybeans.</p>
<p>So the economy displays strong numbers, on average and for the moment. But the average good performance is not benefiting workers, and it is not likely to last.</p>
<p>It takes quite a president to preside over an economy with unemployment rates below 4 percent and to not benefit politically. This is not all Trump’s doing. The erosion of labor bargaining power and the union bashing has been occurring for decades, as has the failure to rein in speculative finance.</p>
<p>But the more that Trump and the Republicans try to brag about this economy, the more they own it. And that’s good news for Democrats. It’s one more topsy-turvy reality in TrumpWorld.</p>
<p><em>This column <a href="https://www.huffingtonpost.com/entry/opinion-trump-economy-midterms_us_5b70f73ae4b0530743cb0c9e">originally appeared</a> at </em>The Huffington Post. <em><a href="http://www.prospect.org/subscribe"><strong>Subscribe here</strong></a>. </em></p>
</div></div></div>Tue, 14 Aug 2018 09:00:20 +0000230880 at http://prospect.orgRobert KuttnerLabor's Astonishing Missouri Win — and the Opening It Portendshttp://prospect.org/blog/tapped/labors-astonishing-missouri-win-and-opening-it-portends
<div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>Ohio’s razor-thin vote for an open House seat got most of the headlines, but the bigger story was the defeat of a right-to-work ballot proposition in supposedly right-wing Missouri.</p>
<p>The bill to make Missouri America’s 28th state with a “right to work” law was passed by the legislature in 2017 and signed by then–Republican Governor Eric Greitens. But the labor movement qualified a ballot initiative overturning the measure, and it passed by a margin of 2 to 1, including in very conservative parts of a state carried overwhelmingly by Trump.</p>
<p>The “right to work” option was added to labor law by the 1947 Taft-Hartley Act. Passed by the Republican 80th Congress over President Truman’s veto (he denounced it as a “slave labor act”), Taft-Hartley allows states to pass laws permitting workers to opt out of paying union dues even when a majority of workers sign union cards.</p>
<p>The name “right to work” was always a fraud. Even in states without such laws, anybody can take a job at a unionized facility. Workers merely have to join, or if they don’t want to join, to pay dues after they are hired.</p>
<p>“Right to work” makes it much harder to organize in such states. Until the last few decades, these measures were largely confined to the anti-union South and Mountain West. Lately, they have been enacted in Michigan, Indiana, and Wisconsin. In the past decade, they've been beaten with ballot initiatives in California and Ohio.</p>
<p>The Missouri vote not only extends and intensifies that success in a supposedly far more conservative state. It shows the latent appeal of pocketbook issues and trade unionism even in Trump country. It shows that the labor movement may be down, but it is far from out.</p>
<p>In Missouri, just 8.7 percent of workers are members of unions. But most working families know someone with a union job and they know the difference a union can make.</p>
<p>The right to have a union signals concern for the forgotten working class. By trying to crush labor, Missouri Republicans signaled not individual rights—the usual pitch for the misnamed “right to work” law—but their contempt for working people, who got the message.</p>
<p>The Missouri outcome also bodes well for the re-election of Senator Claire McCaskill, one of the supposedly endangered Democrats up this fall. More importantly, it signals the resurgence of the labor movement—and reminds Democrats that progressive economics are the indispensable ingredient for success on the beaten-down American heartland.</p>
</div></div></div>Wed, 08 Aug 2018 13:45:24 +0000230840 at http://prospect.orgRobert KuttnerWhy Trump Won’t Be the GOP Nominee in 2020http://prospect.org/article/why-trump-won%E2%80%99t-be-gop-nominee-2020
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<p>Supporters cheer for President Donald Trump during a rally in Lewis Center, Ohio</p>
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<p><span class="dropcap">T</span>here is a saying attributed to various wise men: “Never make predictions, especially about the future.” Allow me to tempt fate and offer some musings about the 2020 election and America’s democratic future:</p>
<p><strong>The Republicans. </strong>I will be amazed if Donald Trump is the Republican nominee. The water around him is rising fast, and he is likely to be long gone by 2020, either via impeachment or resignation in a deal that spares him prosecution.</p>
<p>Trump’s Sunday morning tweet admitted that a June 2016 Trump Tower meeting between campaign aides and a Kremlin-linked lawyer was designed to “get information on an opponent.”</p>
<blockquote class="twitter-tweet" data-lang="en"><p dir="ltr" lang="en" xml:lang="en">Fake News reporting, a complete fabrication, that I am concerned about the meeting my wonderful son, Donald, had in Trump Tower. This was a meeting to get information on an opponent, totally legal and done all the time in politics - and it went nowhere. I did not know about it!</p>
<p>— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/1026084333315153924?ref_src=twsrc%5Etfw">August 5, 2018</a></p></blockquote>
<p>The tweet undercut a lie that Donald Trump Jr. told in July 2017 saying that the meeting had been primarily about the adoption of Russian children. The lie was cooked up in close consultation with Trump Senior.</p>
<p>In a recent <em>New Yorker</em> post, Adam Davidson details <a href="https://www.newyorker.com/news-desk/swamp-chronicles/the-day-trump-told-us-there-was-attempted-collusion-with-russia">just how Trump’s “no collusion” story has fallen apart</a>, in part due to his own impulsive failure to keep his lies straight.</p>
<p>As Davidson summarizes it: </p>
<ul><li>The president’s son and top advisers knowingly met with individuals connected to the Russian government, hoping to obtain dirt on their political opponent.</li>
<li>Documents stolen from the Democratic National Committee and members of the Clinton campaign were later used in an overt effort to sway the election.</li>
<li>When the Trump Tower meeting was uncovered, the president instructed his son and staff to lie about the meeting, and told them precisely which lies to use.</li>
<li>The president is attempting to end the investigation into this meeting and other instances of attempted collusion between his campaign staff and representatives of the Russian government.</li>
</ul><p>All of this is more than enough to justify an obstruction of justice charge, a prime ground for impeachment. It should be more than enough to cause Republican defenders to distance themselves from Trump. As Special Counsel Robert Mueller ferrets out more and more detail, a panicky Trump gets crazier and crazier. He will likely do himself in.</p>
<p>When Trump goes, don’t expect Vice President Mike Pence to be the 2020 nominee either. Pence is a famously inept politician, who was on track to be defeated for re-election as the Republican governor of Indiana—quite a trick. </p>
<p>The hardcore Trump base will be furious if (when) Trump is forced out. If Pence succeeds Trump, there will be a free-for-all, with some candidates running as the true successor to Trump and others trying to reclaim a sane Republican Party. </p>
<p>The latter could include moderates John Kasich, governor of Ohio, who is already positioning himself for a run; Maryland Governor Larry Hogan, and Massachusetts Governor Charlie Baker. Their claim to success is that they get elected as Republicans in normally Democratic states. Their problem is that the electorate in Republican primaries is far to their right. </p>
<p>The former could include any number of frothing-at-the-mouth members of the House Freedom Caucus, plus of course Pence. So my bet is that the Republican nominee will be someone other than Trump, and will be presiding over a badly fractured party. What a gift to Democrats!</p>
<p> </p>
<p><strong>The Democrats. </strong><span class="pullquote-right">The entire Democratic pack is running to the left, because that’s where the grassroots energy is. </span>Even Kirsten Gillibrand is trying to position herself to the left of Elizabeth Warren. One can debate whether the formerly centrist Gillibrand has had a sincere conversion or whether she is an opportunistic weathervane. But her stances say a lot about where the Democratic weather is.</p>
<p>Nobody has officially declared, of course, but as a <a href="http://nymag.com/daily/intelligencer/2018/07/elizabeth-warren-fight-to-defeat-trump.html">splendid profile</a> of Warren in <em>New York</em> magazine explains, Warren is increasingly the favorite of the activist party base and a front-runner to be the nominee. </p>
<p>Another likely finalist is Corey Booker. If Bernie Sanders goes again, he could be a third finalist.</p>
<p>Joe Biden is prominently mentioned, but I don’t buy it. He is almost as old as Bernie. Biden will turn 78 in November 2020, when Sanders will be 79. Biden is loved by the pundit class, but in two previous primary runs, he lost badly.</p>
<p>If I had to place money on it, I’d bet that Warren will be the nominee, and that Sanders won’t run. If Sanders and Warren get into a slugfest and divide the left, a more centrist economic candidate who is left on social issues, like Booker, could win.</p>
<p>As I’ve repeatedly written, Warren is the most effective leader the Dems have had in decades at narrating the lived experience of regular working people—as progressive politics. Some say she won’t do well with white males, that she is great in person, but too preachy and shrill on TV.</p>
<p>We’ll soon find out. I think she will blow the opposition away in the Midwestern primaries and caucuses.</p>
<p> </p>
<p><strong>What about Nancy Pelosi? </strong>Should Democrats take back control of the House in this year’s midterms, there is movement among backbenchers in the House Democratic Caucus to replace Pelosi as prospective speaker with a younger leader who is less of a lightning rod for Republican caricature. There are three problems.</p>
<p>First, the other members of the senior Democratic leadership are of Pelosi’s generation. The whip, Steny Hoyer, at 79, is older then Pelosi. Joe Crowley, the caucus chair, was knocked off in a primary by Alexandria Ocasio-Cortez.</p>
<p>Second, even though some Democratic candidates have pledged not to vote for Pelosi for speaker in order to take that issue off the table, she has been a very effective leader and there is a great deal of loyalty to her. When Ohio Democrat Tim Ryan challenged Pelosi for leader in 2017, Pelosi won overwhelmingly, <a href="https://www.huffingtonpost.com/entry/nancy-pelosi-house-democratic-leader_us_583ed770e4b0ae0e7cdae8f5">134 to 63</a>.</p>
<p>Third, there is no consensus candidate among back-benchers to succeed Pelosi. Ryan would not do much better if he challenged Pelosi again. She might lose a couple of dozen votes from newly elected Democrats, but that’s not sufficient to topple her. And many newly elected Democrats will be women and progressives—like Pelosi.</p>
<p>My bet is that there will be an agreement in the caucus to give Pelosi one more term as speaker in exchange for her agreement to step down after 2020. And then her successor will be someone not in the current top leadership ranks, but a committee chair or other second-tier leadership figure in their forties or fifties. </p>
<p>As for the midterms? A year ago, I bet that Democrats would pick up 54 House seats. They may not gain quite that many, but they should comfortably take back the House.</p>
<p> </p>
<p><strong>A Close Run Thing. </strong>After the Battle of Waterloo, the victorious Duke of Wellington described his victory as “the nearest run thing you ever saw in your life.” The remark has often been rendered as “a close run thing.”</p>
<p>The appointment and survival of Robert Mueller has been a close run thing. Had Attorney General Jeff Sessions not recused himself, had Deputy Attorney General Rod Rosenstein not been committed to the rule of law, had Sessions not refused to buckle under Trump’s taunts and threats, and had just enough senior Republican Trump allies in Congress not warned Trump to keep his hands off Sessions and Rosenstein, Mueller would have been done for.</p>
<p>If American democracy survives President Donald Trump, it will have been a close run thing. At the risk of making the most out-on-a limb prediction of all, I think that it will. </p>
<p>So, who actually said, “Never make predictions, especially about the future”? The expression has been attributed to figures as varied as Albert Einstein, Niels Bohr, Mark Twain, Yogi Berra, and Casey Stengel. Alas, the original is <a href="http://www.peterpatau.com/2006/12/bohr-leads-berra-but-yogi-closing-gap.html">lost to the mists of time</a>. </p>
<p>It turns out that getting the past right is almost as hard as getting the future right.</p>
<p><em>An <a href="https://www.huffingtonpost.com/entry/opinion-kuttner-2020-election-predictions_us_5b67a6f2e4b0b15abaa4792c">earlier version</a> of this article appeared at </em>The Huffington Post. <em><a href="http://www.prospect.org/subscribe">Subscribe here</a>. </em></p>
</div></div></div>Tue, 07 Aug 2018 09:00:00 +0000230829 at http://prospect.orgRobert KuttnerWhy Dems Should Make a $15 Wage Their First Order of Businesshttp://prospect.org/blog/tapped/why-dems-should-make-15-wage-their-first-order-business
<div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>Let’s make the increasingly likely assumption that Democrats take back the House in November. Nothing symbolizes concern for working people better than a higher minimum wage. And nothing jams Republicans quite as starkly as making them take a vote on this.</p>
<p>Do you doubt that? Here is a true fact. In the election of 2004—that’s the one where John Kerry booted a winnable election—activists in Florida qualified a ballot initiative raising that state’s minimum wage by one dollar, from $5.15 to $6.15</p>
<p>Well, you might say, that doesn’t affect all that many people, right? John Kerry was asked to come down and campaign for it. He declined.</p>
<p>How do you think the initiative did in this quintessential swing state, which George W. Bush carried in that election?</p>
<p>The minimum-wage initiative <a href="https://ballotpedia.org/Florida_Minimum_Wage,_Amendment_5_(2004)">won overwhelmingly</a>, with 71 percent of the vote. It carried <em>every single Florida county</em>, including some very conservative ones where the sort of working people who later voted for Donald Trump care about their paychecks.</p>
<p>The minimum-wage initiative won by three million votes. It received about two million votes more than Kerry did, and a million votes more than Bush did. If Kerry had accepted the invitation to go out on street corners and campaign for the minimum-wage hike, he might have been elected president.</p>
<p>So as I was saying, when Democrats take back the House, they should make a vote on a $15 minimum wage their first order of business. Any questions?</p>
</div></div></div>Fri, 03 Aug 2018 18:43:57 +0000230820 at http://prospect.orgRobert KuttnerYes, a Big Blue Wave Is Likely in Novemberhttp://prospect.org/article/yes-big-blue-wave-likely-november
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<p>Senator Bernie Sanders speaks in support of Kansas Democrat Brent Welder at Jack Reardon Convention Center in Kansas City, Kansas</p>
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<p><span class="dropcap">C</span>an we really expect a blue wave election in November, with Democrats taking back the House and even possibly the Senate? </p>
<p>On the one hand, there are some encouraging portents. Since the 1840s, the president’s party has <a href="http://www.pewresearch.org/fact-tank/2014/07/24/voter-turnout-always-drops-off-for-midterm-elections-but-why/">lost seats</a> in 41 of 44 midterm elections. The pattern has been for the out-party to pick up something like 25 seats in the first off-year election after a new president takes office. Trump is of course far less popular than most. And Democratic activism is at a fever pitch.</p>
<p>On the other hand, we have an unprecedented level of voter suppression—purges of the rolls, needlessly stringent ID requirements, games played with polling places and their hours, extreme gerrymandering, and questions about whether systems will be hacked—either by the Russians or by Trumpian locals.</p>
<p>According to the Brennan Center, which carefully tracks this mischief, 13 states have added <a href="http://www.brennancenter.org/new-voting-restrictions-america">restrictive voter-ID requirements</a>, 11 have laws making it harder to register, and six cut back on early voting or voting hours. Many of these are the same states.</p>
<p>In addition, according to the authoritative book on extreme gerrymandering, David Daley’s indispensible <em>Ratf**ked: Why Your Vote Doesn’t Count</em>, seven major Republican-controlled states resorted to extreme gerrymandering for House districts (also state legislative seats) after the 2010 census, including key swing states such as North Carolina, Ohio, Michigan, Wisconsin, Iowa, and Arizona.</p>
<p>As a consequence, Republicans won just 52 percent of the Ohio popular vote for Congress in 2012, but garnered 12 of that state’s 16 congressional seats. In closely divided Michigan, they took 9 of the state’s 14 seats. </p>
<p>So will the combination of voter suppression and gerrymandering abort the supposed Blue Wave? I think not. Here are the counterforces:</p>
<p>First, there are plenty of vulnerable House seats in states that were not subject to voter suppression or gerrymandering. By my count, there are at least 40 such seats, and Democrats need to flip only 23 to take back the House.</p>
<p>There are dozens of Republican seats in play in such states as California, New York, New Jersey, Pennsylvania, Virginia, Oregon, Minnesota, and more, where voting systems are basically honest, and there have even been measures to make it easier to vote.</p>
<p>Second, extreme gerrymandering, as I’ve previously noted, can backfire—because it seeks to pack Democrats into a few seats and spread the presumed Republican voters widely to capture the maximum possible number of seats. But in a wave year, there aren’t enough Republican voters to go around, and designer seats are suddenly at risk. </p>
<p>In Michigan, for example, the average Republican won a House with 57.7 percent of the vote, according to Daley. In a wave year, that’s a flippable margin. And indeed, two Republican-held Michigan seats, the Eighth and 11th Districts, are considered <a href="https://www.cookpolitical.com/ratings/house-race-ratings">seriously in play</a>, and three others are potentially vulnerable. </p>
<p>In heavily gerrymandered Ohio, two Republican House seats, the First District and the 12th, are in play. We will get a preview of just how vulnerable these gerrymandered seats are and how effective voter suppression is on August 7. There will be a special election for a vacant seat in Ohio’s 12th, which covers the suburbs and working-class towns north of Columbus. Trump carried the district in 2016 by 11 points, but polls show the Republican candidate <a href="https://www.cookpolitical.com/analysis/house/ohio-house/oh-12-special-election-going-down-wire">only barely ahead</a>. </p>
<p>Further, voter mobilization can offset voter suppression, and all signs point to a banner year for voter activism on the Democratic side. If you look at Special Counsel Robert Mueller’s investigation and Trump’s deepening woes on multiple fronts, this will all come to a head, in a harmonic convergence, on the eve of the November election.</p>
<p><span class="pullquote-right">Polls on the relative enthusiasm and interest in the election on the part of Republicans and Democrats point to a wide gap that <a href="https://poll.qu.edu/national/release-detail?ReleaseID=2553">favors Democrats</a>. </span></p>
<p>One of the best pieces of news for Democrats is that voters say they are increasingly inclined to vote Democratic for Congress as a way of containing Trump. A <em>Wall Street Journal</em>/NBC poll in June found that voters, by a 25-point margin, said they’d be <a href="https://www.nbcnews.com/politics/first-read/poll-economic-satisfaction-under-trump-isn-t-helping-his-party-n880721">more likely</a> to support an anti-Trump congressional candidate. </p>
<p>Interestingly, political scientists who study election trends conclude, almost unanimously, that turnout is a somewhat overrated factor in off-year election, especially the premise that turning out “the base” is a key favor. </p>
<p>Statistically, off-year turnout falls off dramatically from turnout in presidential years, when the interest in the presidential race provides focus and drama. Historically, off-year turnout has bounced around in a fairly narrow range from the high 30s to low 40s.</p>
<p>Could this year be different, due to the loathing of Trump among Democrats and the heightened interest among all voters, especially those in the Democratic base, notably blacks, Latinos, women, and the young? Quite possibly.</p>
<p>One of the leading scholars of this question, Christopher H. Achen of Princeton University, told me in an email exchange:</p>
<p style="margin-left:22.5pt;">We might see a wave of Democratic turnout in 2018, since Democrats are pretty unhappy. But in the past, those differential turnout effects have often proved to be small. </p>
<p style="margin-left:22.5pt;">Vote shifts at midterms are more often driven by what independents do. They drop out more at midterms, as many studies have shown, but those who do show up swing the election.</p>
<p>Even if the political scientists are right, and base turnout doesn’t rise that much, swing voters are also highly likely to break for the Democrats. Each time I read the projections of the respected Cook Report, a few more seats have slipped from leaning Republican to toss-up, or from toss-up to leaning Democrat.</p>
<p>The best news of all is that Trump has promised to go on the road, “six or seven days a week,” to campaign for endangered Republican candidates. But in all but hard-core Tea Party districts, this is likely to backfire as voters look to Democratic candidates to rein in Trump.</p>
<p>Even the Senate looks possibly in play. In the most recent polls, the Democrat is now leading in two Republican-held seats—Jackie Rosen over Dean Heller in Nevada, and Kyrsten Sinema over Martha McSally in Arizona. Phil Bredesen leads Marsha Blackburn in Tennessee in some polls, and is well behind in others. There could be another <a href="https://realclearpolitics.com/epolls/latest_polls/senate/#">possible pickup</a> in Arizona, depending on the mortality of Senator John McCain. </p>
<p>There are four Democrat-held seats at risk, in Florida, Indiana, North Dakota, and Montana (Joe Manchin in West Virginia, sometimes considered at risk, is now well ahead). If Democrats can hold the at-risk seats, and pick up two of the possible GOP seats, they take the senate 51 to 49. Picking up three would allow them to lose one Democratic incumbent.</p>
<p>As Donald Trump comes into swing districts where Republican incumbents are vulnerable, Democrats should greet him with flowers.</p>
<p><em>An <a href="http://www.prospect.org/subscribe">earlier version</a> of this article appeared at </em>The Huffington Post.<em> <a href="http://www.prospect.org/subscribe">Subscribe here</a>. </em></p>
</div></div></div>Tue, 31 Jul 2018 12:04:18 +0000230795 at http://prospect.orgRobert KuttnerYes, Democrats Need to Run Left -- on Economicshttp://prospect.org/article/yes-democrats-need-run-left-on-economics
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<p><span class="dropcap">H</span>ave you noticed the irritating spate of articles in the mainstream press expressing alarm that the Democratic Party may be moving too far to the left? This has <a href="https://www.cnn.com/2018/06/27/opinions/democrats-should-not-tack-left-cunningham/index.html">become a trope</a> among commentators. </p>
<p>The <a href="https://www.nytimes.com/2018/07/21/us/politics/democratic-party-midterms.html">lead piece</a> in Sunday’s <em>New York Times</em>, for instance, is headlined, “Democrats Brace as Storm Brews to Their Left.” So right from the headline, the progressive energy that is bringing new people into politics and challenging Republican incumbents is condemned as some kind of threat to “Democrats.”</p>
<p>The reporter, Alexander Burns, goes on to quote party leaders warning of the possible ill-effects: “‘There are a lot of moderate and even conservative Democrats in Michigan,’ Mr. Brewer (the former state party chair) cautioned.” Note the use of the loaded verb, <em>cautioned.</em></p>
<p>This is a classic sort of piece in which the writer has a point of view that he wants to get across, but as a reporter on a supposed news story he can’t come right out and say it. So he fishes for quotes to get sources to provide the script for him.</p>
<p>Burns also reports, eyebrow raised, that in Maryland, “Democrats passed over several respected (sic) local officials to select Ben Jealous, a former NAACP president and an ally of Mr. Sanders who backs single-payer health care, as their nominee for governor.” Dear God, not single-payer!? And respected by whom? Reading Burns’ overheated prose, you can almost see the barricades in the streets.</p>
<p>The trouble with this kind of story, which has become a sloppy habit for commentators, is that it lazily conflates two kinds of left. After 40 years of declining economic prospects for ordinary Americans and two years of fake populism by Trump, the Democrats need nothing so much as progressive candidates on pocketbook issues. These are the kind of candidates who can win back seats in Trump country. </p>
<p>There may be lots of moderate Democrats in Michigan, as <em>Times </em>reporter Burns quotes former party chairman Brewer. But moderate on what? Surely not moderate on losing their jobs and their homes.</p>
<p><span class="pullquote-right">Deft Democratic candidates promise hard-pressed voters a better deal on economics, but reflect the views of their districts on hot-button social issues. </span>Conor Lamb managed this brilliantly when he won his special election to Congress in Pennsylvania’s 18th District last March, carrying a district so ostensibly red that Trump carried it by nearly 20 points and the Democrats did not even bother to field a candidate for the seat in 2016 and 2014.</p>
<p>In a seat like New York’s 14th, where rising progressive star Alexandria Ocasio-Cortez knocked off an entrenched incumbent, Joe Crowley, it’s fine to go left on both economic and social issues. But in much of heartland America, economics is the main ticket.</p>
<p>Nobody manages this better than Ohio’s Sherrod Brown. He is currently up between 13 and 17 points in the polls in his Senate re-election campaign, in a state that Donald Trump carried by more than 350,000 votes. Brown is a role model for how to make pocketbook populism work in Trump country. </p>
<p>It’s not that Brown is a moderate on social issues, either. He was the Senate’s lead sponsor on a <a href="https://www.huffingtonpost.com/entry/senate-resolution-lgbtq-pride-month_us_595521a6e4b02734df309ec4">resolution</a> designating June as a month to celebrate and advance LGBTQ rights, and his position on all the social issues from immigration to abortion is progressive. But he leads with the populist economics, so socially conservative working class voters know that Brown is on their side, and they cut him some slack on other issues they may not support.</p>
<p>In West Virginia, the leader of that state’s teacher strike, Richard Ojeda, is waging a strong campaign to take an open House seat long held by Republicans. Ojeda, a Democratic state senator who voted for Trump himself, is running as an out-and-out progressive populist. </p>
<p>Ojeda is so good that he manages to redefine social issues as class issues. Speaking at a pro-choice rally in Charleston that was called to resist a proposed anti-abortion amendment to the state constitution, Ojeda told the crowd that he didn’t really like abortion, but that if it were outlawed, rich women would still get abortions. </p>
<p>West Virginians knew exactly what he meant. Class is a huge issue in Trump country if credible local progressive leaders know how to tap it. Indeed, many other supposed social issues, such as pay equity and parental leave, are really class issues if narrated well.</p>
<p>Only in a handful of swing, Republican-held suburban districts, where voters, especially Republican women, are disgusted with Trump, does it make any sense for a Democrat to run as more of a moderate on economics. And even in those districts, there are less affluent people who would turn out if a candidate gave them a good reason to vote.</p>
<p>So asking whether Democrats are running too far to the left in general is precisely the wrong question. The right question is how they blend economic issues—where they need to be left almost everywhere—with social issues, given that immigration rights, gun rights, or abortion rights can be divisive in the more socially conservative parts of the country. </p>
<p>The worst combination of all, as Hillary Clinton painfully demonstrated in 2016, is left on identity issues and pro-Wall Street on economics. Kirsten Gillibrand and Cory Booker, take note.</p>
<p>In 2018, we can trust most Democrats candidates to get this balance of the economic and the social right, if they pay attention to their districts and they lead with progressive economics. The press should start getting it right, too.</p>
<p><em>An <a href="https://www.huffingtonpost.com/entry/opinion-kuttner-democrats-midterms_us_5b54fdbee4b0de86f48e4926">earlier version</a> of this story appeared at</em>The Huffington Post. <em><a href="http://www.prospect.org/subscribe">Subscribe here</a>.</em></p>
</div></div></div>Tue, 24 Jul 2018 09:00:00 +0000230759 at http://prospect.orgRobert KuttnerHistory’s Most Incompetent Demagogue http://prospect.org/article/history%E2%80%99s-most-incompetent-demagogue
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<p><em>No one likes us<br />I don't know why<br />We may not be perfect<br />But heaven knows we try<br />But all around<br />Even our old friends put us down<br />Let's drop the big one<br />And see what happens</em></p>
<p>—Randy Newman, “Political Science,” 1972</p>
<p><span class="dropcap">S</span>inger, songwriter, and satirist Randy Newman, almost half a century ago, was channeling the know-nothing sentiments that eventually produced a President Trump—a figure who didn’t know much about history or geography, but who knew only that the rest of the world was failing to respect the United States. Trump’s famously thin skin reflects what psychiatrists call a <a href="https://en.wikipedia.org/wiki/Narcissistic_rage_and_narcissistic_injury">narcissistic wound</a>, a deep sense of rage that is triggered by anything that seems like a slight. </p>
<p>Trump in turn channels Americans who feel slighted, disrespected, or disdained as citizens and as patriots—by the turn that the economy and has taken and by the globalists in charge. He turns their sense of grudge into a general assertion that America is being slighted.</p>
<p>Thus the indiscriminate lashing out over trade issues at longstanding allies in Europe, most of which in fact have markets as open as our own. Thus the absurd demand that NATO double its military spending, and the claim that Europe is taking advantage of America’s military shield.</p>
<p>Consider: The U.S. spends around 3.5 percent of GDP on the military. Europe spends between 1 and 2 percent, and has agreed to raise its target to 2. But the United States, in its desire to be global military hegemon, spends sums far beyond the money devoted to NATO. So it is illogical and insane to demand that Europe, which has no desire to police the world, match America’s military outlays.</p>
<p>As Russophile Trump asked in a different mood, “Who needs NATO?” If Vladimir Putin is truly not just Donald Trump’s personal pal but America’s friend, why pour more money into an alliance that was created to defend Europe against Russian expansion?</p>
<p>Trump’s antics at the NATO summit and his visit to Britain displayed all of the reasons why his act is wearing thin. It’s just not believable, even on Fox News, to dump all over NATO one day and then claim the next day that NATO is just great thanks to your leadership, when nothing changed between the two days.</p>
<p>Beyond the boorishness and the affront to diplomatic norms, it’s just not credible to endorse British Prime Minister Theresa’s rival, the clownish Boris Johnson, on one day in a recorded interview, and then claim the next day that May is terrific and that the interview was fake news. </p>
<p>We can thank our lucky stars that Donald Trump has to be possibly the most incompetent demagogue in the history of the world. He has an intuitive feel for how to articulate grievance and keep his critics off balance. But his capacity to deliver is so impaired and incoherent that it precludes results. (It was the Republican Congress that delivered a tax cut, not Trump, and the tax act is <a href="http://prospect.org/article/talking-taxes-voters">already backfiring</a> politically because its benefits are so skewed to the top.) </p>
<p>For the first 18 months of his presidency, Trump has managed to paper over a bizarre coalition between social conservatives angry about their economic condition and corporate plutocrats eager to grab even more. Globalist elites have closed their eyes to the ultra-nationalism as long as Trump was delivering tax cuts, deregulation, and the rest of the corporate agenda. Downhome Tea Party militants ignored the fact that the economic gains went mainly to the top as long as Trump delivered on the social issues.</p>
<p>But this cynical recipe, quite a straddle in its own right, did not require America becoming Russia’s toady; and that reality is alarming both camps. In the most recent <a href="https://www.scribd.com/document/383743616/Fox-July-2018-National-Topline-July-12-Release#fullscreen&amp;from_embed">Fox News poll</a>, conducted July 9-11, just 5 percent think he has been too tough on Putin and 53 percent say he has not been tough enough. </p>
<p>The long awaited indictment of Russian agents for the hacking and leaking of the emails of leading Democrats cast a shadow on Trump’s much-hyped meeting with Putin. It made clear that Trump, in his insistence that the Kremlin had nothing to do with the leaks, was either a fool or a tool (and more likely a willing tool) of the Russians.</p>
<p>At the Helsinki summit, Trump, astonishingly, placed more faith in the denials of Putin than the work of all the U.S. intelligence agencies. <span class="pullquote-right">What could possibly motivate an American president, who lashes out at Canada (Canada!) for a minor slight, to display such credulity when it comes to Russia? </span></p>
<p>What, indeed? We will soon find out, as the details of Robert Mueller’s investigation continue to unfold.</p>
<p>This is hardly Trump’s finest moment. When it comes to Kremlin efforts to destabilize American democracy, Trump is not only at odds with the sentiments of most Americans; he is at odds with the rest of his administration and most of the Republican Party. And if ever there were a time when he could plausibly demonize and possibly fire special counsel Mueller, that time has long passed.</p>
<p>The defense <a href="https://www.vox.com/2018/7/13/17568976/indictments-giuliani-trump-mueller">articulated</a> by his lawyer, Rudy Giuliani, was pitiful. “The Russians are nailed. No Americans are involved. Time for Mueller to end this pursuit of the President and say President Trump is completely innocent.” Dream on, Rudy.</p>
<p>All of this is evidence for why I remain optimistic that Trump is on the ropes politically. Most polls show the Democrats in a very strong position to take control of the House in November, and Trump’s approval rating <a href="https://fivethirtyeight.com/features/how-trumps-popularity-is-holding-up-by-state/">sinking</a> in key swing states. As Mueller produces more indictments and more evidence of plain treason, the impeachable crimes and misdemeanors that have been hidden in plain view since early 2017 will likely turn into a real impeachment.</p>
<p>Only one thing keeps me up nights. Unless the generals have added some kind of fail safe measure, a truly desperate Trump could begin flirting with nuclear delusions.</p>
<p>As Randy Newman presciently closed his song:</p>
<p><em>They all hate us anyhow<br />So let’s drop the big one now.</em></p>
<p><em>An <a href="https://www.huffingtonpost.com/entry/opinion-kuttner-trump-putin_us_5b4c0159e4b0e7c958fc77a7">earlier version</a> of this article appeared at </em>The Huffington Post<em>. <a href="http://www.prospect.org/subscribe">Subscribe here</a>. </em></p>
</div></div></div>Tue, 17 Jul 2018 09:00:00 +0000230712 at http://prospect.orgRobert KuttnerPutin Must Love Having Trump on His Sidehttp://prospect.org/blog/tapped/putin-must-love-having-trump-on-his-side
<div class="field field-name-body field-type-text-with-summary field-label-hidden"><div class="field-items"><div class="field-item even"><p>It must be nice to have Washington on your side.</p>
<p>Vladimir Putin has to be heading home scratching his head. His meeting with Trump was choreographed to be cordial. But why on earth did Trump need to repeat, in even stronger terms, that he believes Putin’s denials over the extensive investigations of the entire U.S. intelligence establishment?</p>
<p>“They said they think it’s Russia; I have President Putin, he just said it’s not Russia,” Mr. Trump declared at the joint press conference—right after the Putin admitted that he had favored Mr. Trump in the election because of his promises of closer relations with Moscow.</p>
<p>Why did Trump not even go through the motions of asking Putin to keep his mitts off the American election process?</p>
<p>This makes no sense, either in domestic political terms or in terms of Trump’s tactical effort to discredit the special counsel. And it strengthens the case for what will be the strongest count in the impeachment of Trump—namely, treason.</p>
<p>Trump's mission to Finland is a political catastrophe for him, capping his buffoonish performances at NATO and in Britain. There is no good explanation for any of it, except a psychiatric one.</p>
<p>Those Democrats who say that raising impeachment will set back their chances of taking the House in the November elections are profoundly wrong. Impeachment just became inevitable.</p>
</div></div></div>Mon, 16 Jul 2018 21:10:49 +0000230714 at http://prospect.orgRobert KuttnerTrump Is Giving Democrats Everything They Need for the Midtermshttp://prospect.org/article/trump-giving-democrats-everything-they-need-midterms
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<p><em>This column originally appeared at</em> <a href="https://www.huffingtonpost.com/entry/opinion-kuttner-blue-wave_us_5b435638e4b07b827cc2afc7">The Huffington Post</a><em>.</em></p>
<p><span class="dropcap">P</span>resident Donald Trump and the Republican Congress either had a great Fourth of July week or a terrible one, depending on how you interpret the suite of recent events and how Democrats respond.</p>
<p>Take the resignation of Justice Anthony Kennedy and the chance for Trump to lock in a solidly right-wing Supreme Court for a generation. On its face, this is a huge gain for the right. The chances are slim that Democrats plus two renegade Republican senators will block a far-right nominee who would vote to overturn <em>Roe v. Wade</em> and do a lot of other mischief.</p>
<p>The always unreliable Senator Susan Collins of Maine has indicated she might vote no, but Senator Lisa Murkowski of Alaska is even cagier, and there is always the leverage of patronage. If the future of the republic hinges on these two mostly bogus Republican moderates, God save America.</p>
<p>Riskier still is the likelihood that Democratic senators up for election in deep-red states will support Trump’s nominee. The likeliest to cave will be Senators Joe Donnelly (Indiana), Heidi Heitkamp (North Dakota), and Joe Manchin (West Virginia). All three voted to confirm Trump’s previous high court nominee, Neil Gorsuch.</p>
<p><span class="pullquote-right">The one silver lining is that the confirmation of yet another hard-right justice, coming just weeks before the November midterm elections, will spike Democratic turnout.</span> And turnout is a separate crucial variable on another front: immigration.</p>
<p><section data-rapid-parsed="subsec" data-rapid-recirc-name="author/robert-kuttner" data-rapid-subsec="zone-author/robert-kuttner" data-rapid-zone="zone-author/robert-kuttner" data-recirc-name="author/robert-kuttner" data-yaft-module="huffpost-zone-author/robert-kuttner" data-zone="author/robert-kuttner"><p>Trump’s policy of separating young children from their parents and creating concentration camps for toddlers was grotesque. His government still has no coherent plan for reuniting children with their families. His claim that he fixed a bad policy that he blames on Democrats is fooling nobody outside of his hardcore base. In swing suburban districts, this is an issue that should damage incumbent Republicans and help Democrats.</p>
<p>On the other hand, never underestimate the capacity of the Democrats to snatch defeat out of the jaws of victory. The slogan “Abolish ICE” may reflect both the deep feeling of immigrants and progressive Americans, but outside the progressive bubble it risks handing Trump a weapon that he can exploit by contending that Democrats want open borders.</p>
<p>If you read the details beneath the slogan, political phenomenon Alexandria Ocasio-<wbr>Cortez and others make clear that they favor replacing ICE with traditional immigration and customs agencies. But at the level of headline and tweet, “Abolish ICE” is risky. “Replace ICE” would be better.</wbr></p>
<p>So one hopes voters pay sufficient attention to the details. When they do, they favor comprehensive immigration reform, and the public generally opposes Trump’s leadership on immigration by a margin of about 59 to 39.</p>
<p>The immigration issue will boost turnout among Trump’s base. But my wager is that it will increase turnout among progressives, citizen immigrants, and swing voters even more.</p>
<p>Trump is also booting other issues that for a time looked to be winners. He gained some cheap headlines for meeting with North Korea’s Kim Jong-Un and claiming a breakthrough toward nuclear disarmament of the Korean peninsula.</p>
<p>The tacit understanding seemed to be a choreography of simulated progress between now and November that would make Trump look like a statesman as well as a master dealmaker. But that assumption is now a shambles.</p>
<p>Secretary of State Mike Pompeo made the mistake of actually pressing the North Koreans for some movement toward nuclear disarmament. They responded by accusing the United States of “a unilateral and gangster-like demand for de-nuclearization.” </p>
<p>We are now one step away from mutual name-calling, something Trump finds hard to resist. <span class="pullquote-right">In any case, it’s clear that the Korea deal was, to use Trump’s favorite term, fake news.</span></p>
<p>And then there is trade. Here Trump had a strong hand. His public was prepared to back a tougher line, and his advocacy of the interests of American manufacturing was good politics in the American heartland. </p>
<p>But Trump has so screwed up the details of trade diplomacy that his winning hand now looks like a loser. He has managed to unite the whole world against America rather than concentrating an alliance against the world’s most important trade predator, China.</p>
<p>The total costs of a tariff war to an otherwise robust economy are modest―a point being made by economists who are usually found claiming that free trade will do everything but cure warts―yet the Chinese are not fools and are superb at targeting their retaliatory tariffs at industries and regions that will do maximum political damage to Trump.</p>
<p>Trump has even managed to make iconic companies like General Motors and Harley Davidson the enemy, and has sown panic among soybean farmers. There is no way this is good politics for him and his base. </p>
<p>And I haven’t even mentioned the continuing drip of the several outstanding investigations. So while the polls may show a slight lift in the broad standing of Trump and the Republican Congress, those numbers bounce up and down. We can remain confident that 2018 is very likely to be a blue wave election.</p>
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</div></div></div>Tue, 10 Jul 2018 09:00:20 +0000230635 at http://prospect.orgRobert KuttnerIt's Still the Economy, Stupidhttp://prospect.org/article/its-still-economy-stupid-0
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<p><span class="dropcap">B</span>y focusing attention on issues such as immigration and Korea, Trump has managed to deflect attention from the economic resentments that helped get him elected—namely, outrage that the rules are rigged on behalf of the wealthy and the powerful. </p>
<p>Will he keep getting away with this, as Republican policies make the rich even richer and regular people more economically precarious? That depends on how astutely blue wave candidates keep pocketbook issues at the forefront.</p>
<p>Exhibits A and B of the Republican doubling down on corrupt plutocracy are the 2017 Tax Act and the coddling of the biggest banks. The Tax Act costs $1.9 trillion in revenue over a decade. Almost all of the breaks went to rich individuals and corporations, but it was supposed to produce trickle-down benefits in the form of more jobs and better pay for workers. </p>
<p>Now the verdict is on pay increases. Worker pay <a href="https://www.bls.gov/news.release/realer.nr0.htm">was flat</a> in the past 12 months, according the Bureau of Labor Statistics. </p>
<p>And instead of increasing domestic investments that might produce jobs, corporations mainly used the money to buy back shares of their own stock, pumping up the share value in order to further enrich executives and shareholders but doing nothing for the economy. </p>
<p>The fraudulence of the Tax Act, as a potential big winner for Democrats this fall, is the subject of the <em>Prospect</em>’s <a href="http://prospect.org/magazine">entire summer issue</a>—and disparities have only increased since we went to press.</p>
<p>According to the latest tabulation by Americans for Tax Fairness (ATF), the total value of share buybacks has been $503 billion since the tax act was passed in last December. Corporations have spent 72 times on share buybacks what they have spent on one-time worker bonuses and raises. About 40 percent of all stocks are held by the top one percent, and most of the rest by the wealthiest ten percent, so this is a pure gift for the rich.</p>
<p>Meanwhile, the Federal Reserve keeps freeing banks from the consumer protections of the Dodd-Frank act and other safeguards of the Obama era. Last month, the Fed and other regulators conducted rigged “stress tests,” whose results allowed then to reduce the capital reserves they are required to keep against losses. With more lenient capital requirements, the big banks are now freer to join the parade of stock buybacks and dividend payouts.</p>
<p>The six largest banks will use $125 billion on buybacks and payouts. A lot of this capital that might have otherwise financed loans. </p>
<p>According to a tabulation by <em>The New York Times</em>, Wells Fargo and Citigroup are <a href="https://www.nytimes.com/2018/06/29/business/dealbook/banks-payouts-shareholders.html">spending</a> more than 100 percent of their projected 2018 profits on buybacks and dividend payouts, and JPMorgan Chase 98 percent. </p>
<p>The most important impact of the tax act will be pressure to cut spending in popular programs such as Social Security and Medicare, to make up the gap. And according to the nonpartisan Congressional Budget Office, the Tax Act, by pushing the national debt to an unprecedented 152 percent of GDP, <a href="http://www.latimes.com/politics/la-na-pol-tax-cuts-debt-20180626-story.html">increases the odds</a> of a new financial crisis. </p>
<p>And Trump’s trade policy, despite its Make-America-Great-Again bluster, is <a href="https://www.nytimes.com/2018/06/29/business/automakers-tariffs-job-cuts.html">starting to undermine</a> good American jobs, by disrupting supply chains and shrinking markets for US exports—but without doing anything serious to alter China’s predatory practices. </p>
<p>He even managed to make the iconic Harley Davidson the enemy.</p>
<p><span class="pullquote-right">In sum, Trump tax and regulatory policies for banks and corporations mainly allow these institutions to fatten themselves, not to help the larger economy, while his tough trade measures are perverse.</span></p>
<p>The key political question is whether voters will connect these dots and hold Trump and the Republicans accountable for the blatant hypocrisy and bait-and-switch. The corporate elite and their Republican allies are counting on voters to be deceived by the sheer complexity of tax, trade and regulatory policy changes, and for hot button issues like immigration to rev up their own base.</p>
<p>Polling and focus group research <a href="http://prospect.org/article/talking-taxes-voters">shows</a> that pocketbook issues are big winners for Democrats. The question is whether Democrats will make this the big theme of the midterms.</p>
<p>Democrats are right to express outrage about Trump’s immigration policies. What’s tricky is that calls to abolish ICE allow Trump and the Republicans to <a href="https://www.washingtonpost.com/news/powerpost/wp/2018/06/29/nobody-knows-how-abolish-ice-plays-politically/?utm_term=.b77c181ceaf3">falsely claim</a> that Democrats are for totally open borders. In fact, if you look closely the statements of the amazing Alexandria Ocasio-Cortez, the call here is to go back to long established agencies like the Immigration and Naturalization Service, which did not smack of a police state.</p>
<p>But voters may not read the fine print, and Democrats need to be careful not to play into Trump’s hands. The Democratic high ground is to remind voters that Trump is no friend of the working person. The more the fall elections stay focused on that core issue, the better Democrats will do.</p>
<p><em>An <a href="https://www.huffingtonpost.com/entry/opinion-kuttner-tax-cuts_us_5b393639e4b08c3a8f6b6188">earlier version</a> of this article appeared at </em>The Huffington Post<em>. <a href="http://www.prospect.org/subscribe">Subscribe here</a>. </em></p>
</div></div></div>Tue, 03 Jul 2018 09:00:00 +0000230585 at http://prospect.orgRobert KuttnerPrinciples for Tax Reformhttp://prospect.org/article/principles-tax-reform
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<p>A demonstrator holds a sign at a rally in opposition to the Republican tax bill held in Lower Manhattan in New York</p>
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<p><em>This article appears in the Summer 2018 issue of</em> The American Prospect <em>magazine. <a href="http://www.prospect.org/subscribe">Subscribe here</a>. </em></p>
<h2><span style="font-size: 1.385em;">Tax Fairness: Corporations and the Wealthy Should Pay Their Fair Share</span></h2>
<p><strong>REPEAL ALL CORPORATE PROVISIONS OF THE TAX ACT</strong>. The idea that corporate rates were too high was always phony. Even at the old rates, the United States had one of the lower net rates of corporate taxation among OECD nations. </p>
<p><strong>RESTORE THE TOP MARGINAL RATES ON INDIVIDUALS</strong>, and add a new surtax rate of 50 percent for incomes over $1 million. During the boom years after World War II, the top rate was never below 70% and the economy flourished.</p>
<p><strong>REPEAL PROVISIONS OF THE LAW INTENDED TO PUNISH CITIZENS </strong>in states with decent public services, such as the cap on deductibility of state and local taxes. At the same time, cap the mortgage interest deduction and use the savings to finance more affordable housing.</p>
<p><strong>TAX INCOME FROM WEALTH THE SAME WAY WE TAX INCOME FROM WORK</strong>. Eliminate all preferential tax treatment for income from dividends and capital gains. That reform also reduces inefficient economic activity intended purely to game the tax system.</p>
<p><strong>RESTORE A ROBUST TAX ON LARGE INHERITANCES</strong> both to increase tax fairness and to curb dynastic wealth.</p>
<h2>Fighting Abuses: Crack Down on Cheating and Gimmicks that Benefit the Rich</h2>
<p><strong>END PROFIT-SHIFTING AND OFFSHORE TAX EVASION</strong> by taxing all corporate profits based on the location of final sale. That way, corporations save no tax money by playing accounting games about where profits are nominally booked. Tax foreign corporate profits the same as domestic profits.</p>
<p><strong>REQUIRE ALL OWNERS OF ASSETS TO DISCLOSE THE TRUE OWNER</strong>, irrespective of dummy corporate shells and trusts.</p>
<p><strong>RESUME INTERNATIONAL LEADERSHIP OF A COMMON EFFORT TO SHUT DOWN TAX HAVENS</strong>. Transactions should be prohibited with any country that refuses to disclose true owners of assets to tax authorities. Banks that collaborate in asset-hiding schemes should be subject to criminal prosecution as money-launderers.</p>
<p><strong>RESTORE ADEQUATE FUNDING TO THE IRS</strong>, with an explicit mandate to investigate complex tax evasion and asset-hiding schemes.</p>
<p><strong>END ARTIFICIAL DEPRECIATION BENEFITS</strong> for owners of commercial real estate.</p>
<p><strong>END ALL TAX SUBSIDIES OF OIL, GAS, AND OTHER EXTRACTIVE INDUSTRIES</strong>.</p>
<p><strong>END THE “CARRIED INTEREST” SPECIAL TREATMENT </strong>of hedge fund profits and tax them as ordinary income.</p>
<h2>Revenue Adequacy: Restore Tax Equity to Finance Public Needs</h2>
<p><strong>IDENTIFY NEW SOURCES OF REVENUE THAT ALSO TARGET ABUSES</strong>. Two good ones are a Wall Street sales tax (“Tobin Tax”) on short-term financial transactions and a carbon tax. Use credits to offset the regressive aspects of a carbon tax.</p>
<p><strong>RESTORE ALL PROGRAM CUTS BASED ON THE $1.9 TRILLION INCREASE IN THE DEFICIT</strong> caused by the Tax Act.</p>
<p><strong>SECURE ADEQUATE REVENUES TO ASSURE FUNDING OF CORE PROGRAMS</strong> such as Social Security, Medicare, and Medicaid, and to make new investments in affordable higher education, infrastructure, early childhood education and child care, and transition to a green economy.</p>
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</div></div></div>Thu, 28 Jun 2018 09:00:00 +0000230444 at http://prospect.orgRobert KuttnerTrump’s Trade Fight with Canada Highlights Two Approaches to Capitalismhttp://prospect.org/article/trump%E2%80%99s-trade-fight-canada-highlights-two-approaches-capitalism
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<p>Canadian Prime Minister Justin Trudeau, right, greets President Donald Trump during the official welcoming ceremony at the G7 Leaders Summit in La Malbaie, Quebec.</p>
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<p><em>This article <a href="https://www.huffingtonpost.com/entry/opinion-kuttner-canada-trade_us_5b2fe8d7e4b0040e27443961">originally appeared</a> at</em> The Huffington Post<em>. <a href="http://www.prospect.org/subscribe">Subscribe here</a>. </em></p>
<p>President <a data-rapid-parsed="slk" data-rapid_p="1" data-v9y="1" data-ylk="subsec:paragraph;cpos:1;elm:context_link;itc:0" href="https://www.huffingtonpost.com/topic/donald-trump">Donald Trump</a>’s savaging of Canadian Prime Minister <a data-rapid-parsed="slk" data-rapid_p="2" data-v9y="1" data-ylk="subsec:paragraph;cpos:1;elm:context_link;itc:0" href="https://www.huffingtonpost.com/topic/justin-trudeau">Justin Trudeau</a> has gotten a good deal of attention for its sheer weirdness—why scapegoat one of America’s most loyal allies and benign trading partners? But it’s worth looking below the surface at the actual trade relationship and the differences between the two countries.</p>
<p>For now, Trump may have done Trudeau a favor. After the U.S. president’s trade tantrum and imposition of tariffs on steel and aluminum, polls showed that 72 percent of Canadians supported Trudeau’s handling of the dust-up. But <a data-rapid-parsed="slk" data-rapid_p="3" data-v9y="1" data-ylk="subsec:paragraph;cpos:2;elm:context_link;itc:0" href="https://www.hilltimes.com/2018/06/21/trudeau-penalty-box-conservatives-top-liberals-poll-suggests/148877">polls also showed</a> Trudeau’s Liberal party slightly behind the rival Conservatives, with both losing ground to the more left-wing New Democrats. </p>
<p>Trade friction between the two nations is nothing new, and the North American Free Trade Agreement (NAFTA) did not put an end to them. One long-standing complaint involves the dairy industry.</p>
<p>Both countries have systems for protecting their dairy farmers against imports, but the American dairy industry has long argued that the Canadian system is more closed. In principle, consumers would benefit from lower prices with freer trade. On the other hand, farming is notoriously vulnerable to drastic price fluctuations, and a somewhat protected system allows for more stable rural life. Economic theory does not provide a simple right answer.</p>
<p>Another bone of contention is Canadian exports of lumber. This is a classic case where the theory of free trade applies. Canada is blessed with abundant forests. It makes sense that Canada should be the low-cost producer and exporter. </p>
<p>American timber interests, however, have argued going back to the Reagan administration that Canada’s system for managing its national forests gives Canadian lumber exporters too good a deal and that the price is therefore too cheap. Sorry, but Canada has the better of that argument.</p>
<p>Canada also naturally benefits from cheap hydropower, which helps it produce competitively priced aluminum, the production of which is very energy-intensive. Is this an artificial subsidy requiring a U.S. tariff? Probably not.</p>
<p><span class="pullquote-right">Dig a little deeper and you appreciate that Canada and the U.S. have rather different economic and social systems and different approaches to capitalism.</span> Both nations have forms of managed capitalism; neither practices laissez faire. But Canada’s, by design, serves ordinary people more equitably. America’s system is increasingly managed in the self-interest of the very rich.</p>
<p>Here are a few key differences. Canada has much stronger unions. In the 1950s, both Canada and the U.S. had union membership rates of about 35 percent. After six decades of union-bashing by employers, the American private sector unionization rate has been cut to around 6 percent, while Canada enforces worker rights and its union level is basically unchanged. That, in turn, influences living standards.</p>
<p>Canada also recovered more quickly from the global financial collapse of 2008 because the Canadians insisted on a well–regulated banking system while the other G-7 nations were going on a deregulation binge. And Canada of course has a universal health insurance system, as well as a lot more, well-run affordable social housing.</p>
<p>Canada has its problems, to be sure, but one of them is not U.S.-style inequality. A classic book on the subject, Dan Zuberi’s <em>Differences That Matter </em>(2006), compared the working poor in service-sector jobs in Vancouver and Seattle. These are two very similar cities, but for the fact that one is in the U.S. and the other is in Canada.</p>
<p>Zuberi found that in such occupations as hotel and motel work, Canadians lived far more decently. With unions, their earnings were higher. Their pensions were better, housing more affordable, health coverage taken for granted.</p>
<p>U.S. gross domestic product performance is a bit better than Canada’s on average, but the gains go mostly to the top. Canada has simply chosen to have a more equitable brand of capitalism. This of course has political consequences.</p>
<p>Despite the presence of lots of immigrants, Canada has had far less of a populist explosion than other Western countries, because regular Canadians are getting a fair shake. (A recent exception is Ontario, where the party of Doug Ford, a Trumpian conservative, <a data-rapid-parsed="slk" data-rapid_p="9" data-v9y="1" data-ylk="subsec:paragraph;cpos:14;elm:context_link;itc:0" href="https://www.huffingtonpost.ca/2018/06/08/how-did-doug-ford-win_a_23454555/">won the June election</a> with just 40.6 percent of the vote because the two more left-wing parties, the Liberals and the socialist New Democrats, could not agree on a common strategy. There’s also a lesson in that.)</p>
<p>But on the whole, the Canadian center is holding, and it’s a progressive center.</p>
<p>Defending a decent form of capitalism against the pressures of one-size-fits-all globalism is not easy under the best of circumstances. It’s even harder when you are heavily reliant on trade with a much larger economy immediately to your south—and harder still when the government of that nation is temporarily in the hands of a lunatic.</p>
</div></div></div>Tue, 26 Jun 2018 09:00:00 +0000230508 at http://prospect.orgRobert KuttnerThe Emblem of This Erahttp://prospect.org/article/emblem-era
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<p>President Donald Trump is silhouetted in a car on his arrival at the Presidential Palace in Hanoi, Vietnam. </p>
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<p><em>This article appears in the Summer 2018 issue of</em> The American Prospect <em>magazine. <a href="http://www.prospect.org/subscribe">Subscribe here</a>. </em></p>
<p><span class="dropcap">T</span>his is the first time in nearly 30 years of publication that <em>The American Prospect </em>has devoted an entire issue of the magazine to a single topic. We are doing so because the 2017 Tax Act so perfectly displays so much of what is rotten and false about this period of Republican rule, and sets up an epic debate about what the two parties stand for.</p>
<p>Tax cuts are invariably political winners, or so the Republicans thought. But this one is so grotesque that it is already backfiring. Whether it truly blows up on the right, and becomes a major political liability this fall, depends in large part on how skilled Democrats and commentators are at narrating all that is wrong with it.</p>
<p>The law makes clear that the deep corruption in this era emanates not just from Trump personally. He would have signed almost any tax cut bill that made it to his desk. This bill was mainly the creation of the Republican Congress, a wish list of provisions awaiting the right political moment. In that respect, it is emblematic of the deeper venality and cynicism of the Republican Party. If the consequences are properly understood by the voters, Republican legislators will pay for both the sins of Trump and their own.</p>
<p>We also chose to devote an entire issue to the Tax Act because of the need to provide an authoritative primer for use in public and political argument. Some of the details are highly technical, but not so technical that they can’t be explained or understood by the citizenry if well illustrated and explained. The top line could not be clearer. This is a law by and for the top few percent, with hidden costs for the rest.</p>
<p>How does the Tax Act epitomize Republican hypocrisy and opportunism? Let us count the ways. Begin with the process. The bill was jammed through Congress in violation of everything we learn about how American government is supposed to work. There were no hearings on its major provisions, which were cobbled together in backroom deals as House and Senate Republican leaders looked for a draft that might win a majority of votes. Tax preferences were revised helter-skelter, as Republicans first identified cuts and then sought to offset part of the revenue loss. Democrats were given no opportunity to participate in the legislative process.</p>
<p>The final cost was estimated via back-of-the-envelope calculations, using heroic assumptions about offsetting economic benefits that might increase revenues. The sponsors put out the figure of $1.5 trillion over a decade. When the Congressional Budget Office ran the actual numbers, the cost was $1.9 trillion. As part of the sheer budget gimmickry (and in a display of real loyalties), the corporate tax cuts were made permanent and the individual ones temporary.</p>
<p>The act reeks of hypocrisy. The bill was going to discourage offshoring of investment and jobs in line with the Make America Great Again theme. When the dust settled, it added new incentives that tax overseas investments at lower rates than domestic ones.</p>
<p>Republicans profess to be fiscal conservatives. In April, the Republican House even voted 233 to 184 to approve a constitutional amendment requiring the federal budget to be balanced. (It failed to get the necessary two-thirds.) They suspended their budget-balance mantra just long enough to pass the Tax Act—which would have been prohibited by their own amendment. Once the Tax Act increased the cumulative ten-year deficit and national debt by nearly $2 trillion, Republicans abruptly rediscovered fiscal virtue, and began demanding offsetting cuts in programs such as Social Security and Medicare.</p>
<p>Republicans supposedly are big backers of states’ rights. But that principle has eroded into code for weakening federal laws that promote social or racial justice. In the tax bill, states’ rights were repeatedly violated. Citizens of states were denied the long-established right to deduct all state and local taxes against federal taxes owed. A $10,000 cap was put on all such deductions, a deliberate poke in the eye at states with relatively progressive taxes and decently funded services. These, of course, just happen to be states with a habit of voting for Democrats. So in those states, many middle-class taxpayers, who went into debt to purchase homes, will face significant tax increases. This nasty provision also violates the longstanding Republican gripes against double taxation. It comes as close as legally possible to imposing differential tax rates on Republicans and Democrats.</p>
<p><span class="pullquote-right">The benefits are mostly corporate.</span> In all, America’s corporations gain tax cuts that will total more than $1.7 trillion over a decade. This was billed as increasing investment and workers’ wages, but corporations have not in fact increased their investment, and most of the money has gone into stock buybacks. Taken as a whole, the bill delivers 83 percent of the cuts to the top 1 percent. It further shifts the tax load from capital to labor, and further cuts the tax on large estates to almost the vanishing point. Is there any better display of Republican loyalties?</p>
<p>Republicans also professed to support tax simplification and economic efficiency. This is the party whose leaders once spoke of creating a tax code so fair and simple that your tax return could fit on a postcard. Well, there has never been a tax bill more complex and convoluted than the misnamed Tax Cuts and Jobs Act. The law only increases the economic inequality that is already extreme. Precious little will trickle down, and the trickle-down is negative when offsetting cuts in social outlays and increases in state and local taxes are factored in. The act should serve as the final epitaph for the claims of supply-side economics.</p>
<p>The provisions creating additional breaks for affluent taxpayers who can reconstitute themselves as entities that qualify for “pass-through” treatment create jobs mainly for accountants. They do nothing for economic efficiency, except to thwart it—by steering activity to tax advantage rather than to entrepreneurship. The new rules on foreign- versus domestic-sourced income mainly invite other gimmicks for where income is booked.</p>
<p>The increased complexity, combined with the demonization and underfunding of the IRS, means more outright tax evasion and fewer audits of the wealthy, and a still larger share of taxes paid by everyone else. The policy and symbolism have a final rendezvous when it comes to the Evader in Chief. The Tax Act generalizes for a larger group of the very rich the same accounting games long played by this president, Donald Trump, who will save millions in his own taxes. All of this and more will be detailed in the pages that follow.</p>
<p>Since the current era of tax-cutting began with Ronald Reagan in the 1980s, Republicans have usually taken care to make sure that some non-trivial share of the benefits actually trickled down to working people, and to find at least some Democratic allies to join them in supporting the legislation. This time the greed was so palpable that they neglected even this gambit.</p>
<p>The gains are overwhelmingly directed to corporations and the rich, to the point where a majority of employed voters tell pollsters that they haven’t seen any benefits in their take-home pay. Not a single Democrat voted for this bill. In past tax cuts, Republicans could count on a quarter to a third of Democrats to go along for the ride, in part because their big donors wanted their support, and in part to curry favor with large corporations. Also, many Democrats figured that if Republicans were enacting a politically popular tax bill that was going to pass anyway, they might as well share in the credit.</p>
<p>The fact that no Democrat in either the House or Senate voted for this bill reflects how Democrats were frozen out of the legislative process, and the fact that benefits for regular people were trivial. It also suggests improved party discipline and unity on the Democratic side.</p>
<p>Both the substance of this legislation and the way it was enacted were so reckless on the part of Republicans that it suggests a kind of <em>Après moi, le déluge </em>mentality. Republicans seemed to sense that their days as governing party were numbered, that Democrats were likely to take the House in 2018 and perhaps keep it for a while. This was their last chance for many years to grab as much as they possibly could for their corporate and individual predator allies of great wealth such as the Koch brothers, and many members of their own caucus who personally gained. So damn the torpedoes and take it all, regardless of the partisan fallout.</p>
<p>The Tax Act thus sets up a defining argument between Republicans and Democrats, one that Democrats had better get right. Republicans are already sensing that their prize achievement is a political loser. Early in 2018, the White House and leading Republican strategists were urging GOP candidates to put their tax cut front and center in their messaging. But the candidates’ political ears and their on-the-ground polling told them something else. The act was not rallying voters, base or swing, to the Republican side. In the March special election for Pennsylvania’s 18th Congressional District, which was narrowly won by the Democrat Conor Lamb, the Republican Rick Saccone in the campaign’s two final weeks pulled TV ads touting the tax cut, as did other Republican-affiliated, nominally independent groups. Since then, Republicans have been uncharacteristically quiet about their prime legislative achievement.</p>
<p>Polling and focus group interviews have found that support for the Tax Act has dwindled over time, and declines even more when voters learn additional details. Just 28 percent of voters now tell pollsters that they would be more likely to support a candidate who had voted for the Tax Act, while 37 percent say they would be more likely to vote against them. By an immense margin of 58 percent to 12 percent, people believe that benefits under the act are more likely to go to executives and shareholders than to employees. So even before they hear political debate, voters are primed, based on their own knowledge and intuition, that the act benefits the elite and not people like them.</p>
<p>One of the most persuasive arguments against the act, according to pollster Guy Molyneux (see page 18), is that it will increase the national debt and risk offsetting cuts in valued programs like Social Security and Medicare. The polling finds that connecting the debt to cuts in social programs is a far more powerful argument than messages about either the program cuts or increased debt alone. This also comports with core progressive values, since embracing budget balance as an end in itself is not good politics for Democrats. That ideology and rhetoric blurs partisan differences and leads Democrats into traps like the budget sequester, in which Republicans call the tune and the result is bipartisan responsibility for cuts in valued programs.</p>
<p>A second potent argument that scores well in focus groups is a reminder of the sheer special interest corruption in the Tax Act. Republican legislators not only voted to give themselves a tax cut, but gave special breaks to allies like the Koch brothers, who are spending $400 million to elect Republicans this fall and were rewarded with more than a billion dollars in tax breaks. They gave the health insurance and drug industries billions in new tax cuts, none of which result in lower retail drug costs or insurance premiums, which are likely to rise as a result of the law. And they created new loopholes that serve developers like Trump but for which working people don’t qualify. Arguments like these gain the support of around 60 percent of people who hear them.</p>
<p>A final winning argument is to remind voters of all the other things America might have done with $1.9 trillion. This includes investment in better schools, college debt relief, rebuilding decaying infrastructure, and the related creation of good jobs.</p>
<p>Earlier in this election year, many Democrats bought into the erroneous premise that the tax cut would be a strong plus for Republicans, and tried to avoid talking about it. That turned out to be profoundly wrong. Not only is the tax cut potentially a winning issue, it is a defining issue—in terms of whose side Republicans are on; in terms of their contempt for cherished public services that Democrats advocate and defend; and in terms of blatant Republican opportunism.</p>
<p>The Tax Act has turned out to be an issue on which to challenge the entire litany of Republican policies, beliefs, and practices. It was intended as a gift to grateful taxpayers. Handled properly in the coming campaign, it is more of a gift to Democrats.</p>
</div></div></div>Wed, 20 Jun 2018 09:00:00 +0000230423 at http://prospect.orgRobert KuttnerTrump Blunders Forward with Incoherent Trade Policyhttp://prospect.org/article/trump-blunders-forward-incoherent-trade-policy
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<p>President Donald Trump, center, and First Lady Melania Trump, second from left, accompanied by Chinese President Xi Jinping, third from right, tour the Forbidden City in Beijing.</p>
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<p><em>This article <a href="https://www.huffingtonpost.com/entry/opinion-kuttner-trump-trade_us_5b27c939e4b0783ae12b9d8d">originally appeared</a> at </em>The Huffington Post.<em> <a href="http://www.prospect.org/subscribe">Subscribe here</a>. </em></p>
<p><span class="dropcap">W</span>hat on earth is President <a data-rapid-parsed="slk" data-rapid_p="1" data-v9y="1" data-ylk="subsec:paragraph;cpos:1;elm:context_link;itc:0" href="https://www.huffingtonpost.com/topic/donald-trump">Donald Trump</a> up to with his trade policy? So far, he has managed to grab the symbolism of trade serving the interest of elites but not regular people. Slapping on tariffs, almost indiscriminately, does accomplish that. Tariffs are popular with frustrated working people who see jobs migrating overseas.</p>
<p>But he has totally bungled the substance of repositioning America in the world, rebalancing the calculus of whose interests are served by trade and rebuilding an American economy of broadly shared prosperity.</p>
<p>This is classic Trump, of course. This botched execution is one part short attention span, disdain for details and thin skin, and one part a preference for cheap political symbolism over substance.</p>
<p>This includes a schizophrenic policy on China, bailing out ZTE one week and starting a general tariff war the next; <a data-rapid-parsed="slk" data-rapid_p="2" data-v9y="1" data-ylk="subsec:paragraph;cpos:4;elm:context_link;itc:0" href="https://www.huffingtonpost.com/entry/opinion-kuttner-trump-g7_us_5b1d4839e4b0bbb7a0de4722">a bizarre demonization of close allies</a> whose collaboration we need if China is to change its overall predatory system; and a blunderbuss <a data-rapid-parsed="slk" data-rapid_p="3" data-v9y="1" data-ylk="subsec:paragraph;cpos:4;elm:context_link;itc:0" href="https://www.huffingtonpost.com/entry/opinion-kuttner-nafta-trade_us_5b01f809e4b0463cdba39de3">attack on Canada and Mexico</a> in the context of a legitimate need to renegotiate NAFTA.</p>
<p>All of this could have serious economic consequences in an election year, as well as long-term ramifications. Gary Cohn, the Wall Streeter who was Trump’s first chief economic adviser, <a data-rapid-parsed="slk" data-rapid_p="9" data-v9y="1" data-ylk="subsec:paragraph;cpos:5;elm:context_link;itc:0" href="https://www.cnn.com/2018/06/15/politics/gary-cohn-trump-trade/index.html">has warned</a> that trade conflicts could wipe out the stimulus effects of the tax cut (admittedly, a pretty low bar). Trump’s approach also fails to connect a revised trade policy to a serious industrial policy, which we will need if we are actually committed to reclaiming American manufacturing.</p>
<p>The usual suspects have framed this debate as free trade versus protectionism. But that is highly misleading. There is no such thing as perfectly free trade. All markets are creatures of rules.</p>
<p>Domestically, we have long regulated capitalism, because markets often price things wrong—everything from wages and working conditions to research and education to pollution to toxic financial products. And markets do not suddenly become perfect just because commerce crosses borders.</p>
<p>Trump’s policy mess needs to be located in a broader debate about what America’s trade policy should look like. The free trade establishment has used “trade” deals like NAFTA and the Trans-Pacific Partnership, as well as the WTO, to use global rules to dismantle domestic managed capitalism. If you want an impeccably mainstream critique of this use of “trade,” check out the work of Harvard economist <a data-rapid-parsed="slk" data-rapid_p="10" data-v9y="1" data-ylk="subsec:paragraph;cpos:8;elm:context_link;itc:0" href="https://www.socialeurope.eu/globalization-paradox">Dani Rodrik</a>. I have also been making <a data-rapid-parsed="slk" data-rapid_p="11" data-v9y="1" data-ylk="subsec:paragraph;cpos:8;elm:context_link;itc:0" href="https://www.amazon.com/Can-Democracy-Survive-Global-Capitalism/dp/0393609936?tag=thehuffingtop-20">this criticism</a> for three decades.</p>
<p>A variant on this critique holds that the U.S. has allowed China to use state-led capitalism to pillage American manufacturing and trade secrets, because the Wall Street allies making U.S. policy are happy to let key sectors go as long as they get cut in on the financial action.</p>
<p>On the far right, there is a kind of economic nationalism that <a data-rapid-parsed="slk" data-rapid_p="12" data-v9y="1" data-ylk="subsec:paragraph;cpos:10;elm:context_link;itc:0" href="http://prospect.org/article/white-nationalism-and-economic-nationalism">partly overlaps the left critique</a>, though it includes a disgraceful racism. This was the pitch of Steve Bannon that led to his phone call to me last summer and then to his dismissal as White House chief strategist. Even Bannon, however, has a more coherent view of how to proceed than his former boss does.</p>
<p>Some of Trump’s current key trade advisers, such as chief trade negotiator Robert Lighthizer, have a sensible approach to revising trade policy. They have a clearer sense of the words, while Trump gets only the music. They must be having fits.</p>
<p>Trump’s actual policies are problematic in several respects. First, they do real damage with allies.</p>
<p>Second, when it comes to China, where trade policy really is overdue for revision, they don’t get the job done—they just increase acrimony.</p>
<p>Third, they make it easier for critics to blur the legitimate progressive critique of free trade policy with Trump’s own mess.</p>
<p><span class="pullquote-right">There is one good effect of Trump’s approach. It splits the Republican business coalition down the middle.</span></p>
<p>The powerful farm lobby, which depends heavily on exports, is apoplectic. Congress is on the verge of passing rare bipartisan legislation to<a data-rapid-parsed="slk" data-rapid_p="13" data-v9y="1" data-ylk="subsec:paragraph;cpos:16;elm:context_link;itc:0" href="http://thehill.com/homenews/senate/392571-senate-braces-for-trump-showdown-over-chinese-telecom-giant"> overturn Trump’s lifting of sanctions</a> on Chinese telecom giant ZTE. The corporate lobby is massively unhappy with an impending trade war with the European Union.</p>
<p>In this respect, Trump is a useful idiot. Not only is he widening the latent schisms between his own right-wing populism and the GOP’s corporate elite, but he has blown open the door to a very different view of trade.</p>
<p>Trump’s own faux-populist impulses grasp the need for a different approach to trade. But his own impulsiveness and ultimate corporate allegiance prevent him from devising a constructive alternative.</p>
<p>The important thing for Democrats and progressives to do is to selectively support some administration initiatives, such as the need to renegotiate NAFTA and to challenge China’s state-led capitalism—while a spotlight on the need for a different trade policy that is both coherent and supportive of a decent society.</p>
<p>This is not a simple choice of smart free trade versus stupid protection, though most aspects of Trump’s policies are surely stupid. It is a choice between the old, discredited formula of letting free markets rip and a sensible form of managed capitalism both domestically and globally. The next administration just might get both the politics and the policies right.</p>
</div></div></div>Tue, 19 Jun 2018 09:00:00 +0000230407 at http://prospect.orgRobert KuttnerThe Lasting Damage Of Trump’s Disastrous Diplomacyhttp://prospect.org/article/lasting-damage-trumps-disastrous-diplomacy
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<p>From left, Japanese Prime Minister Shinzo Abe, French President Emmanuel Macron, German Chancellor Angela Merkel, President Donald Trump, and Italian Prime Minister Giuseppe Conte on June 8, 2018, in Charlevoix, Canada</p>
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<p><span class="dropcap">I</span>t’s hardly a surprise that <a data-rapid-parsed="slk" data-rapid_p="1" data-v9y="1" data-ylk="subsec:paragraph;cpos:1;elm:context_link;itc:0" href="https://www.huffingtonpost.com/topic/donald-trump" target="_blank">Donald Trump</a> blew up the Group of Seven summit. In his warped view of the world, America’s closest allies are enemies, and nations that represent dangerous threats are friends.</p>
<p>Thus Russia is to be welcomed back, while Canada, about as benign a neighbor as exists, is a menace for taking advantage of the United States on trade. (Fact check: <a data-rapid-parsed="slk" data-rapid_p="2" data-v9y="1" data-ylk="subsec:paragraph;cpos:2;elm:context_link;itc:0" href="https://ustr.gov/countries-regions/americas/canada" target="_blank">The U.S. government’s own data</a> suggest the United States ran a small trade surplus with Canada in 2017.) The European Union, whose subsidy and open-market policies are on a par with our own, is seen as a bigger threat than mercantilist China. And North Korea’s dictator Kim Jong-Un gets warmer words than the leaders of Europe.</p>
<p>Has the world gone mad? No, only Donald Trump.</p>
<p>Trump’s bullshit in a china shop can best be understood on three levels. First, sheer ignorance. Second, thin-skinned petulance and pique. After barely papering over differences at the actual summit, Trump destroyed whatever shred of goodwill remained in <a data-rapid-parsed="slk" data-rapid_p="3" data-v9y="1" data-ylk="subsec:paragraph;cpos:4;elm:context_link;itc:0" href="https://www.huffingtonpost.com/entry/justin-trudeau-vows-canada-wont-be-pushed-around-by-trump_us_5b1c49f0e4b0adfb826a02b4" target="_blank">a tweetstorm</a> triggered by the effrontery of Canadian Prime Minister Justin Trudeau’s criticisms.</p>
<p>But the third reason is the most dangerous of all—corruption and opportunism. Trump <a data-rapid-parsed="slk" data-rapid_p="10" data-v9y="1" data-ylk="subsec:paragraph;cpos:5;elm:context_link;itc:0" href="https://www.huffingtonpost.com/entry/trump-china-zte_us_5af9f701e4b0200bcab7fa66" target="_blank">gave China a pass</a> on the national-security risks of the telecom company ZTE as an apparent thank you for Chinese gifts to his business empire and that of his daughter Ivanka.</p>
<p>He keeps cutting Russian President Vladimir Putin slack after years of Russian bailouts for Trump’s business empire. <span class="pullquote-right">He is now in danger of being taken to the cleaners by North Korea, because Kim is better at sucking up to Trump than, say, Trudeau or French President Emmanuel Macron, and because Trump desperately needs a symbolic win.</span></p>
<p>In the wake of the G-7 fiasco, the pressing questions are these: How much irreversible damage is Trump doing, and how long will it take for Republicans to rein him in or push him out?</p>
<p>The damage with our European and North American allies is likely temporary. Basically, Europe has decided to quarantine Trump for the duration. There will be some economic harm from these trade skirmishes, but the deeper amity and sense of common interest among the nations of the West runs strong, and relations will be put back on track once Trump is gone.</p>
<p>Trump has also given a gift to the usually fractious Europeans by reminding them of the importance of their own unity. In Canada, the popularity of Justin Trudeau, a good man and a good progressive, will rise thanks to his standing up to Trump’s infantile bullying. And in Mexico, leftist candidate Andrés Manuel López Obrador <a data-rapid-parsed="slk" data-rapid_p="12" data-v9y="1" data-ylk="subsec:paragraph;cpos:9;elm:context_link;itc:0" href="https://www.bloomberg.com/graphics/2018-mexican-election/" target="_blank">has a lead of 25 percent</a> in polling ahead of the July presidential election, and is only helped further by Trump’s war of insults.</p>
<p>Trump has managed to unite the rest of the West against the United States and himself. More serious is his amateurish diplomacy with Russia, North Korea, and China.</p>
<p>China has a well-conceived and well-executed program known as <a data-rapid-parsed="slk" data-rapid_p="13" data-v9y="1" data-ylk="subsec:paragraph;cpos:11;elm:context_link;itc:0" href="https://www.cfr.org/blog/why-does-everyone-hate-made-china-2025" target="_blank">Made in China 2025</a>, through which Beijing hopes to achieve dominance in all of the cutting-edge technologies, from artificial intelligence to electric power and electric vehicles to 5G wireless networking. Some of this reflects China’s cheating on the global trade system; some of it is the result of China’s own planning system and diligence.</p>
<p>The West had better respond, and in a unified way. But Trump’s self-serving incompetence does serious damage―and time is short.</p>
<p>Russia continues its program of destabilizing Western democracy, unmolested. While Trump was blowing up the G-7 summit, his director of national intelligence, Dan Coats, was <a data-rapid-parsed="slk" data-rapid_p="14" data-v9y="1" data-ylk="subsec:paragraph;cpos:13;elm:context_link;itc:0" href="https://www.nytimes.com/2018/06/09/world/g7-trump-russia.html?hp&amp;action=click&amp;pgtype=Homepage&amp;clickSource=story-heading&amp;module=b-lede-package-region&amp;region=top-news&amp;WT.nav=top-news" target="_blank">speaking at a conference in Normandy</a>.</p>
<p>“These Russian actions are purposeful and premeditated and they represent an all-out assault by Vladimir Putin on the rule of law, Western ideals and democratic norms. … The Russians are actively seeking to divide our alliance and we must not allow that to happen,” Coats warned.</p>
<p><span class="pullquote-right">Even more than Putin, it is Trump who is succeeding in dividing the Western alliance.</span></p>
<p>Meanwhile, the wrong sort of nuclear deal with North Korea could allow Trump the theatrical appearance of a diplomatic win, while permitting Kim to continue with a clandestine nuclear program. This is, of course, exactly what Trump accused Barack Obama of doing <a data-rapid-parsed="slk" data-rapid_p="15" data-v9y="1" data-ylk="subsec:paragraph;cpos:16;elm:context_link;itc:0" href="https://www.huffingtonpost.com/entry/opinion-kuttner-iran-deal-europe_us_5af9ac11e4b09a94524aac7e" target="_blank">with Iran</a>, only worse.</p>
<p>So what it will take for his own party to say “enough”?</p>
<p>There are some encouraging green shoots. A <a data-rapid-parsed="slk" data-rapid_p="16" data-v9y="1" data-ylk="subsec:paragraph;cpos:18;elm:context_link;itc:0" href="https://www.nytimes.com/2018/05/25/us/politics/trump-trade-zte.html" target="_blank">bipartisan group of 27 senators</a> organized by Florida Senator Marco Rubio sent an angry letter objecting to Trump’s coddling of ZTE. Republican members of the House have joined Democrats in a discharge petition forcing action on long-blocked immigration reform. The number of Republicans willing to speak out against Trump’s foreign policy follies is slowly growing.</p>
<p>But mere criticism of Trump usually backfires. What he understands is power. Ultimately, nothing short of Trump’s removal will rein him in.</p>
<p><em>This article previously appeared at </em><a href="https://www.huffingtonpost.com/entry/opinion-kuttner-trump-g7_us_5b1d4839e4b0bbb7a0de4722">HuffPost</a>.</p>
</div></div></div>Tue, 12 Jun 2018 09:00:20 +0000230361 at http://prospect.orgRobert KuttnerThe Normalization of Corruptionhttp://prospect.org/article/normalization-corruption
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<p>President Donald Trump walks to his vehicle after speaking in Houston.</p>
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<p><span class="dropcap">T</span>he emblem of this era is the mingling of personal corruption on the part of America’s leaders with the political corruption of American capitalism and the rise of autocracy. And of course the three trends feed on each other.</p>
<p>Take the case of the latest assertions by Trump’s lawyers in their memo to the Special Counsel Robert Mueller. The claim is naked in its candor: Trump is simply above the law. Anything that he does as president is legal, simply because he does it. This is Trump’s attitude generally, and it is the essence of tyranny.</p>
<p>Autocracy and personal corruption go hand in hand. If there are no democratic checks, the autocrat can be as corrupt as he likes. Trump’s signature in the run-up to the 2016 election, and in office, has been trading favors with Vladimir Putin—not favors that reset our diplomatic relationship with Russia and cooled tensions, but personal favors that benefited Trump financially. As an autocrat, he believes that he can avoid being held to account, and he may be right.</p>
<p>Trump is now repeating with China what he did with Russia: trading away national security goals for personal profit.</p>
<p>There is no other explanation for his overruling of the entire national security establishment in Trump’s defense of the Chinese telecom company ZTE, which was caught red-handed violating the embargo against North Korea and which represents a real espionage threat. But the Chinese simply bribed Trump with a huge loan to a Trump-sponsored project before the fact of Trump’s policy reversal, and then added a thank you by giving special lucrative trademark approval to Ivanka Trump afterwards.</p>
<p>Selling out your country for personal gain is an impeachable offense hidden in plain view. But Trump’s personal corruption as a dictatorial president is enabled by Republicans, who are willing to look the other way most of the time because his corruption serves their corruption.</p>
<p>The deeper disease is the slide of American capitalism into kleptocracy—in which very wealthy people make an alliance with the dictator, who helps them rig the rules to enable themselves to become even richer, in violation of anything like the supposed efficiency of markets that Republicans keep invoking. Crony capitalism works best when it enjoys an alliance with corrupt political leaders.</p>
<p>Does any serious person think that the gutting of the 2010 Dodd-Frank Act will be good for the economy? It’s a naked power grab that will create more risk for the financial system, and more immense wealth for the biggest banks who can in turn reward politicians.</p>
<p>It is bad enough that Republicans are so invested in the success of Trump that they invite and benefit from flagrant corruption. What’s worse, the American kleptocracy is in many respects bipartisan.</p>
<p>How else can we explain the fact that 16 Senate Democrats and 33 House Democrats <a href="https://thinkprogress.org/democrats-sweeping-banking-deregulation-bill-9d100624c2fd/">voted to weaken</a> the Dodd-Frank Act. It’s not as if voters in swing states are clamoring for more regulatory relief for Wall Street.</p>
<p>In 1989, when the Berlin Wall fell, many commentators were proclaiming that the world would now embrace the model of capitalist democracy. They didn’t reckon with the appeal of Putinism—corrupt crony capitalism linked to political dictatorship, with forms of democracy just for show.</p>
<p>It’s not hard to see why Putin is such a pal and role model for Trump. And here’s the worst part. Pervasive corruption invites pervasive cynicism and even political nihilism on the part of citizens—a sense that they all do it, that the system is hopelessly rigged, and that politics is a sham and a futile exercise.</p>
<p>That’s the essence of Putinism. That’s how Trump gets away with the total contradiction of being a corrupt billionaire who professes to speak for the people. If they all do it, we might as well have a leader who is at least a tough guy rather than a wimp.</p>
<p><span class="pullquote-right">We are not quite all the way on the path to Putin hell, but we are well down the road.</span> Our Republic has suffered grave damage. </p>
<p>It might yet be saved if Mueller picks up the pace and manages to tender his presumably explosive report before he is removed; or if there is not too much outright electoral theft in November and Democrats take back the House and begin the impeachment process; or if some Republicans consider the larger stakes and are seized with an outbreak of civic conscience.</p>
<p>There is the further risk of what could happen when a progressive Democrat gets the presidential nomination in 2020, and vows to clean out crony capitalism for real, Roosevelt style. The entire kleptocracy, from the Koch brothers to Wall Street Democrats, will do everything to keep that candidate from destroying their game.</p>
<p>We may yet get our Republic back, but it will take courage, mobilization, leadership, and luck.</p>
<p><em>An <a href="https://www.huffingtonpost.com/entry/opinion-kuttner-trump-corruption_us_5b15354ee4b010565aaddcdc">earlier version</a> of this article appeared at </em>HuffPost. <em><a href="http://www.prospect.org/subscribe">Subscribe here</a>.</em></p>
</div></div></div>Tue, 05 Jun 2018 09:00:00 +0000230323 at http://prospect.orgRobert KuttnerTrump Is Right About NAFTA, But That Doesn’t Make Him Pro-Workerhttp://prospect.org/article/trump-right-about-nafta-doesn%E2%80%99t-make-him-pro-worker
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<p>Crates of U.S. manufactured parts are prepared for shipment into Mexico at Freight Dispatch Service Agency LTD in Pharr, Texas.</p>
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<p><em>This article <a href="https://www.huffingtonpost.com/entry/opinion-kuttner-nafta-trade_us_5b01f809e4b0463cdba39de3">originally appeared</a> at </em>The Huffington Post.<em> <a href="http://www.prospect.org/subscribe">Subscribe here</a>. </em></p>
<p><span class="dropcap">A</span>s a deadline for <a data-rapid-parsed="slk" data-rapid_p="1" data-v9y="1" data-ylk="subsec:paragraph;cpos:1;elm:context_link;itc:0" href="https://www.huffingtonpost.com/topic/nafta">NAFTA</a> negotiations set by House Speaker Paul Ryan came and went on May 17, Treasury Secretary Steve Mnuchin <a data-rapid-parsed="slk" data-rapid_p="2" data-v9y="1" data-ylk="subsec:paragraph;cpos:1;elm:context_link;itc:0" href="https://www.politico.com/story/2018/05/20/mnuchin-nafta-trade-trump-598805">now says</a> that the negotiations are still alive and might even extend into next year.</p>
<p>Of course, President <a data-rapid-parsed="slk" data-rapid_p="3" data-v9y="1" data-ylk="subsec:paragraph;cpos:2;elm:context_link;itc:0" href="https://www.huffingtonpost.com/topic/donald-trump">Donald Trump</a> has undercut his senior aides before, and there is no telling what he might impulsively do if the mood strikes him. Previously, Trump had insisted that he <a data-rapid-parsed="slk" data-rapid_p="4" data-v9y="1" data-ylk="subsec:paragraph;cpos:2;elm:context_link;itc:0" href="https://www.politico.com/story/2018/04/20/lighthizer-nafta-trump-trade-congress-539248">would withdraw</a> the U.S. from the North American Free Trade Agreement if negotiations were not concluded and approved by this session of Congress.</p>
<p>By delaying NAFTA talks until after the November election, however, the GOP could avoid an awkward situation in which most of the NAFTA revisions demanded by Trump’s negotiators are supported by labor and the Democrats and opposed by big business-friendly Republicans. It is another case of Trump trying to steal the liberals’ clothes with a working-class base that once reliably supported Democrats but now is more inclined to back Trump.</p>
<p>One key demand sought by Trump’s negotiators would kill the NAFTA provision that allows corporations to challenge ordinary domestic regulations in special tribunals as improper restraints of trade. Another would add more accurate rules of origin so that inputs substantially made in China are not credited as produced in North America.</p>
<p>A third would increase labor rights in Mexico. It would even require that a large share of NAFTA production be made by workers earning <a data-rapid-parsed="slk" data-rapid_p="9" data-v9y="1" data-ylk="subsec:paragraph;cpos:5;elm:context_link;itc:0" href="https://www.wsj.com/articles/u-s-pushes-nafta-partners-to-accept-a-wage-floor-in-auto-sector-1525685401">at least $16 an hour</a>, to reduce job flight to Mexico.</p>
<p>This provision, among others, <a data-rapid-parsed="slk" data-rapid_p="11" data-v9y="1" data-ylk="subsec:paragraph;cpos:6;elm:context_link;itc:0" href="https://www.reuters.com/article/us-trade-nafta/nafta-deal-might-be-ready-by-end-may-could-go-past-july-1-election-mexico-idUSKCN1II2BU">proved too much</a> for Mexico to swallow, with that country facing its own presidential election on July 1, but it is emblematic of how the Trump administration has shifted the conversation on trade. </p>
<p>It’s unlikely that Trump studied NAFTA in any detail. The architect of this proposed deal is his chief trade negotiator, Robert Lighthizer. But Trump, for all his weirdness, has a keen nose for winning political symbolism.</p>
<p>Trump’s earlier threat to withdraw from NAFTA gave his negotiators the leverage to win surprising tentative concessions from Canada and Mexico. If no deal is reached, a NAFTA pullout may yet be a different sort of win for Trump with his nationalist base.</p>
<p>Otherwise, Trump’s brand of nationalism is mostly economically irrational and politically demagogic. His other trade policies are all over the map. </p>
<p>He has wildly oscillated between getting tough with China and proposing <a data-rapid-parsed="slk" data-rapid_p="12" data-v9y="1" data-ylk="subsec:paragraph;cpos:10;elm:context_link;itc:0" href="https://www.nytimes.com/2018/05/17/opinion/trump-china-bribe-national-security.html">sweetheart deals</a> that serve his own business interests.</p>
<p>His tariff orders on steel and aluminum are scattershot rather than targeted at nations that illegally subsidize their own exports. He has needlessly started <a data-rapid-parsed="slk" data-rapid_p="13" data-v9y="1" data-ylk="subsec:paragraph;cpos:11;elm:context_link;itc:0" href="https://www.huffingtonpost.com/entry/opinion-kuttner-iran-deal-europe_us_5af9ac11e4b09a94524aac7e">a trade war with Europe</a> as fallout from his withdrawal from the Iran nuclear deal. </p>
<p>But in this case, the proposed changes to NAFTA are good policy. It’s nonsensical for a North American free trade area to allow tariff-free inputs from China, which is not a party to the agreement. It is equally wrong to allow extralegal tribunals for corporations to do end-runs around national regulation. It is also reasonable to put limits on jobs fleeing to a low-wage nation, Mexico, in which workers have no effective labor rights.</p>
<p>The existing elements of NAFTA are not “free trade.” They amount to a special-interest deal by and for multinational corporations, which undermines the ability of the U.S. to broker a balanced form of decent capitalism.</p>
<p>Yet the political center—Democratic presidents Barack Obama and Bill Clinton, as well as Republicans George H.W. Bush, George W. Bush, and Ronald Reagan—promoted global trade deals that plainly served corporations at the expense of workers. That embrace gave a huge opening to Trump.</p>
<p>Other elements of Trump’s pro-worker stance are largely phony. His <a data-rapid-parsed="slk" data-rapid_p="14" data-v9y="1" data-ylk="subsec:paragraph;cpos:15;elm:context_link;itc:0" href="https://www.huffingtonpost.com/entry/opinion-kuttner-republicans-tax-cut_us_5add0678e4b089e33c8945fc">tax reform</a> serves mainly corporations. His regulatory changes reduce protections for workers and consumers. His proposal to charge foreign health systems more for drugs would <a data-rapid-parsed="slk" data-rapid_p="15" data-v9y="1" data-ylk="subsec:paragraph;cpos:15;elm:context_link;itc:0" href="https://www.huffingtonpost.com/entry/trump-pharma-drug-prices_us_5af5920de4b032b10bf9eaa7">boost pharmaceutical profits</a> and not reduce prices for American consumers.</p>
<p>But in a climate of resentment against weakened job opportunity, compounded by a mashup of identity conflicts, a little economic nationalism goes a long way. That Trump is able to exploit these grievances is substantially the fault of the political center for embracing a Davos version of globalism that not only undermines living standards for millions of Americans, but looks down on them as losers. If NAFTA becomes a winner for Trump, the corporate globalists have themselves to blame.</p>
<p>With the exception of NAFTA, the brand of economic nationalism espoused by onetime Trump adviser Steve Bannon―and by Trump’s own rhetoric―has more to do with demonizing foreigners than truly benefiting American workers. Yet there is a positive, progressive version of economic nationalism waiting in the wings. It would revise trade deals that sell out American workers, repeal Trump’s tax cut and put the money instead in large-scale infrastructure and green-transition investments.</p>
<p>That could produce millions of good jobs and new made-in-America technologies and industries, as well as renewed credibility for an activist government. It would be salutary to have a real debate, one that progressives could win, about what could truly Make America Great Again.</p>
</div></div></div>Tue, 22 May 2018 09:00:00 +0000230237 at http://prospect.orgRobert KuttnerTrump’s Gratuitous Damage to Global Harmonyhttp://prospect.org/article/trump%E2%80%99s-gratuitous-damage-global-harmony
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<p>President Donald Trump speaks at the North Side Gymnasium in Elkhart, Indiana </p>
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<p><span class="dropcap">T</span>hat Nobel is likely to continue eluding President Trump. Consider his latest trade war with Europe.</p>
<p>Are you concerned that Trump will win the Nobel Prize for making peace with North Korea’s Kim Jong-Un? You needn’t worry.</p>
<p>Kim and Trump may stage the illusion of progress towards a de-nuclearized Korea. But the details of that goal will take long and arduous diplomacy. </p>
<p>One risk is that Kim is setting a trap for Trump in which both leaders can claim success, but as negotiations drag on North Korea keeps working on its arsenal and its nuclear delivery vehicles. Trump, showman and cynic, may go along so that he can claim a diplomatic breakthrough.</p>
<p>The opposite risk is that Trump will realize that he is being played, and will one-up Kim by walking out of the talks, thus adding to regional tensions. The one thing that will not happen is the immediate conclusion of a final and verifiable deal.</p>
<p>But a bogus deal with North Korea is only one of several arenas in which Trump is setting back world peace. Even more serious is the fallout from Trump’s disavowal of the 2015 nuclear accord with Iran.</p>
<p>President Trump’s scrapping of that deal could set off new tensions in the region, including a strengthening of Iranian hardliners and an unleashing of a bellicose Israel. But that may not be the most serious fallout. Trump’s Iran policy is at risk of fracturing what’s left of the American alliance with Europe.</p>
<p>The Trump administration insists that any nation that does business with Iran will be in violation of the U.S. commercial boycott and will face stringent sanctions. That targets the EU, which supports the deal and did not want Trump to kill it.</p>
<p>After sanctions were lifted in 2015, Europe dramatically increased its trade and investment with Iran. Airbus has already begun delivering jetliners to Iran Air, a 100-plane deal worth billions. The French oil and gas company Total has a $5 billion deal to extract Iranian natural gas. Volkswagen exports cars to Iran, and Peugeot Citroen manufactures them there.</p>
<p>Under the U.S. sanctions regime, any European company that does business in or with Iran will be barred from doing business in the U.S. The U.S. Treasury has given European companies three to six months to end their dealings in or with Iran.</p>
<p>But this threat, recently echoed by Trump’s new ambassador to Germany, Richard Grennell, in a tweet (!) warning Europe’s companies to start winding down their operations in Iran, has produced something that has eluded the fragmented members of the EU for decades—absolute unity. </p>
<p>Europe is just emerging from a decade-long recession and its recovery is fragile. The success of the Macron presidency in Paris and the shaky Merkel coalition government in Berlin depend on the recovery not being derailed.</p>
<p><span class="pullquote-right">Europe can ill afford to be barred from the American market, and this latest assault on Europe’s sovereignty is one affront too many. </span>By last Friday, Europe’s leaders were resolute in their determination to nullify Trump’s threat of sanctions.</p>
<p>Bruno Le Maire, the French finance minister, told a television interviewer, “We have to work among ourselves in Europe to defend our European economic sovereignty.” He added, “Do we want to be a vassal that obeys and jumps to attention?” Similar comments were heard in other European capitals.</p>
<p>Between the final round of negotiations to revise or withdraw from NAFTA, to tit-for-tat trade threats against China, and the imposition of tariffs on aluminum and steel, there has been a lot of loose talk about trade wars. But general sanctions against major EU-based companies really would be a trade war.</p>
<p>It’s one thing to take a hard line against Iran, Mexico, China, or Korea. It’s something else to get gravely at odds with America’s most reliable ally. </p>
<p>Someone will have to back down here, and for once Europe may find some spine. If not, this is a trade war for real, and it will be Trump’s achievement, as the collateral damage of a dumb and totally gratuitous foreign policy detour in the Middle East. </p>
<p>The Nobel Peace Prize, let’s recall, is given by the Norwegians, among the most open-minded, idealist, and diplomatically proficient of European nations. (The other Nobels are given by the Swedes.) It was the Norwegian Nobel committee that awarded President Barack Obama the Nobel Peace Prize not long after he took office, in part because he wasn’t George W. Bush and in part because of the hope he represented. Donald Trump makes Bush look like Pope Francis. </p>
<p>Maybe they should bestow a Nobel Anti-Peace Prize for doing the most needless damage to world peace. Trump would be a shoo-in for the booby prize.</p>
<p><em>An <a href="https://www.huffingtonpost.com/entry/opinion-kuttner-iran-deal-europe_us_5af9ac11e4b09a94524aac7e">earlier version</a> of this article appeared at </em>HuffPost. <em><a href="http://www.prospect.org/subscribe">Subscribe here</a>.</em></p>
</div></div></div>Tue, 15 May 2018 09:00:00 +0000230183 at http://prospect.orgRobert KuttnerBirthday Greetings to Karl Marx http://prospect.org/article/birthday-greetings-karl-marx
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<p>The Karl Marx Statue in Trier is revealed in a ceremony</p>
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<p><span class="dropcap">T</span>his past weekend marked the 200th anniversary of Karl Marx, who was born in the German city of Trier on May 5, 1818. With more and more workers pushed aside by the latest brand of capitalism and more and more of the gains going to the top, it’s a good time to inquire if perhaps Marx might have been right after all.</p>
<p>When I was first studying such things, Marx looked to me like an idiot. He was convinced that capitalism would collapse from its own contradictions, and then would give way to a workers’ paradise.</p>
<p>But in postwar America and in much of the West, the proletariat was making steady gains. Far from turning revolutionary, workers were joining unions and supporting mainstream center-left political parties. </p>
<p>Far from containing the seeds of its own destruction, capitalism in Europe and America had at last been harnessed in the broad public interest. The welfare state was spreading the good life. The bourgeoisie was doing well, but it was mostly well-behaved. Nobody was being “immiserated.” Political democracy was containing capitalist excess.</p>
<p>Meanwhile, nations that invoked Marx’s name were both economic failures and political hellholes. Far from Marx’s benign “dictatorship of the proletariat,” communist countries were ordinary despotisms, and corrupt to boot.</p>
<p>Well, what a difference a generation makes. Today, Marxian concepts that once sounded far-fetched or silly are pretty good descriptions of reality. </p>
<p>There is indeed a global reserve army of the unemployed, and it drags down wages generally. More and more working people are being dumped into a <em>lumpenproletariat </em>made up of would-be workers without regular jobs.</p>
<p>When I was in graduate school, I snickered at Marxists who described the state as “the executive committee of the ruling class.” Hadn’t they read their Galbraith? Didn’t they appreciate that the democratic state, along with the labor movement, were instruments of what Galbraith termed countervailing power? </p>
<p>The state was not captive to the ruling class. Since Roosevelt, it was a core institution that offset the influence of economic royalists.</p>
<p>Well, today the state has been pretty well captured by the Koch brothers and company. Goldman Sachs has provided five of the last six secretaries of the Treasury, under Democrats and Republicans alike. That sounds a lot more like an Executive Committee than Countervailing Power.</p>
<p><span class="pullquote-right">The postwar boom, rather than being a permanent refutation of Marx, was more like a fortunate historical blip—when the stars were aligned to regulate capitalism in the broad public interest. </span>But one bad decade, the 1970s, was sufficient to restore both capitalists and the ideology of raw, free-market capitalism its usual power—despite the verdict of history that raw capitalism keeps generating needless economic catastrophe. </p>
<p>The greatest of the 20th-century economists, John Maynard Keynes, demonstrated that this did not have to be so. With the right policy interventions, a basically capitalist economy could indeed be harnessed to serve the broad working public. </p>
<p>The postwar boom seemed to prove Keynes right. But one of Keynes’s lesser-known colleagues, the Polish-born economist Michal Kalecki, who located himself somewhere between Keynes and Marx, offered the following rebuttal: Even if it was possible as a matter of economics to harness a basically capitalist system to serve the broad mass of people, as a matter of politics the capitalist class would never let policymakers do it.</p>
<p>When Kalecki made that case in the mid-1940s, it looked as if Keynes had the better of the argument. But after four decades of the destruction of managed capitalism by resurgent business and banking elites, Kalecki looks prophetic.</p>
<p>This is not to say that Marx was prophetic, however. For Marx got one big thing wrong. Touchingly, he imagined that as capitalism became more and more destructive, the workers of the world would unite.</p>
<p>In fact, frustrated workers, whether in Poland, Hungary, Turkey, Britain, France, or the U.S., are not joining hands with their brothers and sisters in other lands. They are turning to neo-fascists at home. Poor Marx left out the appeal of ultra-nationalism.</p>
<p>Well, Happy Birthday, Karl. We can learn some things from you about capitalism’s multiple pathologies. But when it comes to devising a politics that will harness the market once again, so that ordinary people can benefit from all of the economy’s bounty and neo-fascists can return to their caves, we are on our own.</p>
<p><em>An <a href="https://www.huffingtonpost.com/entry/opinion-kuttner-marx-birthday_us_5aef7840e4b0c4f19323e376">earlier version</a> of this article appeared at</em>The Huffington Post. <em><a href="http://www.prospect.org/subscribe">Subscribe here</a>.</em></p>
</div></div></div>Tue, 08 May 2018 09:00:00 +0000230140 at http://prospect.orgRobert KuttnerIs Trump Capable of Realism on North Korea?http://prospect.org/article/trump-capable-realism-on-north-korea
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<p>North Korean leader Kim Jong Un and South Korean President Moon Jae-in shake hands after signing on a joint statement at the border village of Panmunjom in the Demilitarized Zone in South Korea.</p>
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<p><em>This article <a href="https://www.huffingtonpost.com/entry/opinion-kuttner-north-korea_us_5ae5de8fe4b04aa23f240c4c">originally appeared</a> at</em> The Huffington Post. <em><a href="http://www.prospect.org/subscribe">Subscribe here</a>.</em></p>
<p><span class="dropcap">I</span>n the afterglow of the summit between the leaders of North and South Korea, as we await the even more historic meeting between President <a data-beacon="{&quot;p&quot;:{&quot;lnid&quot;:&quot;Donald Trump&quot;,&quot;mpid&quot;:1,&quot;plid&quot;:&quot;https://www.huffingtonpost.com/topic/donald-trump&quot;}}" data-beacon-parsed="true" data-rapid-parsed="slk" data-rapid_p="1" data-v9y="1" data-ylk="subsec:paragraph;cpos:1;elm:context_link" href="https://www.huffingtonpost.com/topic/donald-trump">Donald Trump</a> and Pyongyang’s Kim Jong-un, there are three distinct risks. </p>
<p>One is that a genuine breakthrough occurs and Trump reaps the political credit. <em>The </em><em>New York Times</em>’s Maureen Dowd, tongue only partly in cheek, <a data-beacon="{&quot;p&quot;:{&quot;lnid&quot;:&quot;imagines Trump getting the Nobel Peace Prize&quot;,&quot;mpid&quot;:2,&quot;plid&quot;:&quot;https://www.nytimes.com/2018/04/28/opinion/sunday/trump-our-cartoon-nobel-laureate.html&quot;}}" data-beacon-parsed="true" data-rapid-parsed="slk" data-rapid_p="2" data-v9y="1" data-ylk="subsec:paragraph;cpos:2;elm:context_link" href="https://www.nytimes.com/2018/04/28/opinion/sunday/trump-our-cartoon-nobel-laureate.html">imagines Trump getting the Nobel Peace Prize</a>.</p>
<p>An opposite risk is that Trump wants a deal so badly that he is willing to be played for a fool. A number of conservative commentators have warned about this. <a data-beacon="{&quot;p&quot;:{&quot;lnid&quot;:&quot;Steven F. Hayes, in The Weekly Standard, warned&quot;,&quot;mpid&quot;:3,&quot;plid&quot;:&quot;https://www.weeklystandard.com/stephen-f.-hayes/first-the-victory-then-the-celebration&quot;}}" data-beacon-parsed="true" data-rapid-parsed="slk" data-rapid_p="3" data-v9y="1" data-ylk="subsec:paragraph;cpos:3;elm:context_link" href="https://www.weeklystandard.com/stephen-f.-hayes/first-the-victory-then-the-celebration">Steven F. Hayes, in <em>The Weekly Standard</em>, warned</a>, “Trump’s comments last week suggest he’s a sucker waiting to be played. The president volunteered that Kim Jong-un ‘has really been very open and I think very honorable based on what we are seeing.’ There is nothing remotely honorable about Kim Jong-un.”</p>
<p>A third risk is that Trump, in a moment of characteristic pique, will react badly to something Kim says at the summit and will walk out, undermining an admittedly long-shot chance to reduce tensions in one of the world’s most fraught regions.</p>
<p>And of course, with Trump you never know. Right after the North-South leaders’ summit, Trump did exactly the opposite of what any seasoned diplomat would advise him to do: He raised expectations sky high. Friday morning, <a data-beacon="{&quot;p&quot;:{&quot;lnid&quot;:&quot;Trump blurted out an imbecile tweet&quot;,&quot;mpid&quot;:4,&quot;plid&quot;:&quot;https://twitter.com/realdonaldtrump/status/989820401596366849&quot;}}" data-beacon-parsed="true" data-rapid-parsed="slk" data-rapid_p="4" data-v9y="1" data-ylk="subsec:paragraph;cpos:5;elm:context_link" href="https://twitter.com/realdonaldtrump/status/989820401596366849">Trump blurted out an imbecile tweet</a>: “KOREAN WAR TO END!!!!”</p>
<p>If things don’t go so smoothly, will he revert to insulting tweets about Little Rocket Man? Or will he even remember last week’s euphoric tweets?</p>
<p>Let’s get a grip and take a hard look at each of these risks. If a Korean peace process does move forward, history may give Trump a bit of credit for the use of nuclear bluster that suggested to Kim that Trump might be even crazier than Kim is. But it’s mainly other stars that are in rare alignment for a possible deal.</p>
<p>One of those stars is that economic sanctions have finally started to bite seriously on North Korea’s economy. Kim, a relatively new leader, would like to deliver greater prosperity to his long-suffering people, who are all too aware of the prodigious economy just across the 38th parallel to their south. Another star is the rare presence of a left-wing leader in South Korea, Moon Jae-in, who was willing to make overtures to the North, including an invitation for it to participate in the recent Winter Olympics.</p>
<p>Americans who have long been critical of the global overreach of the U.S. should welcome that the two main players in this diplomacy are North and South Korean leaders, who know far more about their divided country and have far higher stakes in a peace process than Washington does. Imagine the effrontery of the Koreans wanting to take matters into their own hands!</p>
<p><span class="pullquote-right">If some kind of a deal is indeed struck, this will be mainly a Korean show. Trump will only be able to bless it, or wreck it.</span></p>
<p>But what of the other risks? Despite the raised expectations, it’s clear that no final deal will come out of Trump’s meeting with Kim. The path toward a true rapprochement between the two Koreas, much less a nuclear-free peninsula, will be the product of complex ongoing diplomacy involving both the Koreans and the great powers as guarantors. As innumerable commentators have pointed out, North Korean leaders have dangled this offer before, only to pull it back each time.</p>
<p>The new role of the South and Kim’s desire for economic and diplomatic normalization makes a deal slightly more possible this time. But the details of what denuclearization really means, with what sort of inspection regime, remain the usual thorny ones.</p>
<p>And that brings up the other risk. The kind of deal required is all too reminiscent of a deal that Trump detests—the nuclear deal with Iran. North Korea, if anything, is far less trustworthy than Iran, and far more of a total dictatorship.</p>
<p>Granted, consistency is not exactly Trump’s strong suit, but would he really trust Kim to keep his word? And should he?</p>
<p>This era necessarily requires a brand of diplomacy based on the school of foreign policy known as realism. It means dealing pragmatically with regimes whose values you hate, because you lack the capacity to make over the world in the American image. </p>
<p>This represents a dramatic turn from the more idealistic visions of Bill Clinton and Barack Obama, who hoped to export democracy and human rights to the world, and a rejection of the regime-change visions of George W. Bush. But a foreign policy based on realism requires hard questions as well as deft, complex, and patient diplomacy—once again, not exactly Trump’s trademark.</p>
<p>Do we really want a détente with one of the most odious regimes in the world, North Korea, assuming we can get one? The sad answer is yes. We are not going to alter or destroy that regime, and some would argue that less isolation could moderate North Korea over time (though that hypothesis <a data-beacon="{&quot;p&quot;:{&quot;lnid&quot;:&quot;failed when it came to China&quot;,&quot;mpid&quot;:10,&quot;plid&quot;:&quot;https://www.huffingtonpost.com/entry/opinion-kuttner-china-hungary_us_5acb5e02e4b07a3485e69af6&quot;}}" data-beacon-parsed="true" data-rapid-parsed="slk" data-rapid_p="11" data-v9y="0" data-ylk="subsec:paragraph;cpos:17;elm:context_link" href="https://www.huffingtonpost.com/entry/opinion-kuttner-china-hungary_us_5acb5e02e4b07a3485e69af6">failed when it came to China</a>.)</p>
<p>The world today has scores of thuggish regimes. Some of these are our allies, such as Saudi Arabia and Turkey. We have an off-again, on-again intelligence partnership with Pakistan, which harbors radical Islamists. We can’t quite decide whether to swallow hard and live with a brutal regime in Syria or try to destroy it.</p>
<p>Despite Trump’s sheer cynicism—a precondition for a good Realist foreign policy (see Kissinger, Henry)—he is about the last leader in the world who can competently carry out such a policy. Take the case of his alliance with Vladimir Putin.</p>
<p>It would be one thing if Trump’s overtures to Putin were in service of a new, post-Gorbachev entente with an increasingly authoritarian Russia. We may not like Putin, but let’s recognize Russia’s legitimate interests, and damp down tensions. But that is not what’s occurring at all. Trump’s coddling of Russia began as sheer opportunism for his business empire and morphed into sheer opportunism to serve his political goals. The U.S. as a nation gets nothing in return—not even a respite from Kremlin election meddling.</p>
<p>The Korea peace process could go in any number of directions. One thing is clear: If it stays alive at all, it will take a long time. Hold that Nobel.</p>
</div></div></div>Tue, 01 May 2018 09:00:00 +0000230099 at http://prospect.orgRobert Kuttner